- Paul Dales, chief Australia economist at Capital Economics
Australia's business investment surged unexpectedly in the final quarter of 2015, with mining investment decline moderating, while non-mining investment rose slightly. According to the Australian Bureau of Statistics, business capital expenditure increased 0.8% to 31.941 billion, a sharp improvement after the revised 8.4% plunge in the prior quarter, which was the biggest quarterly decline since records began in 1987. The data brought an end to four straight quarters of decline in capex, the longest streak since recessionary years of 1990 to 1992. Total investment spending in the mining sector plummeted 7.0% during the reported period, with spending on buildings and structures falling 0.4%, and spending on equipment, plants and machinery. Manufacturing capex spending dropped 3.6%, with large decreases in both building and structures, as well as equipment, plant and machinery. Nevertheless, spending in other industries soared 3.6% in the fourth quarter, a sign that non-mining business investment is starting to improve.
Officials have been trying to re-focus Australia's economy after long years of flourishing mining investment amid decline in global commodity prices. The Reserve Bank of Australia recently said that the slowdown in mining investment is about half-way through its cycle.
© Dukascopy Bank SA