The Treasurer, Mr Peter Costello, welcomed the Private New Capital Expenditure figures released by the ABS as a further indication of the strength of domestic demand.
The figures suggest that businesses across a wide range of sectors remain positive about the outlook for economic growth notwithstanding developments in Asia.
The first estimate of expected capital expenditure in 1998-99 showed a 19.2 per cent increase over the equivalent estimate for 1997-98, particularly for equipment investment expectations, which rose by 28.2 per cent over the equivalent estimate for 1997-98. All industries expect very strong growth in investments in 1998-99 over 1997-98 levels.
Actual investment expenditure grew solidly in the December quarter and that intended expenditure for the remainder of 1997-98 has increased.
For the December quarter 1997, business investment rose by 5.2 per cent in constant price seasonally adjusted terms. Building investment rose by 20.5 per cent in constant terms, more than reversing the fall experienced in the September quarter. This result is consistent with other indicators of building investments such as building approvals, finance commitments and work yet to be done, all of which have been pointing to solid building investment growth in 1997-98. Equipment spending in constant price terms rose marginally in the quarter, to be 17.5 per cent about its level in the December quarter 1996.
Total capital expenditure expectations for 1997-98 strengthened in the most recent survey, largely reflecting a firming in expected growth in plant and equipment spending. Expectations for building investment in 1997-98 rose slightly compared with the previous estimate.