Australia’s Private Capital Expenditure Sees 2.8% Increase

The latest figures from the Australian Bureau of Statistics (ABS) reveal a 2.8% rise in private new capital expenditure (capex) for the June quarter of 2023. This growth is accompanied by a substantial 10.8% increase compared to the same period last year.

Robert Ewing, Head of New Capital Expenditure Statistics at ABS, noted that this increase was driven by heightened investments in new equipment and machinery (up by 1.9%) and building and structures (up by 3.5%).

The boost in equipment and machinery investment reflects a lessening of supply chain disruptions, with improvements in vehicle availability. Some businesses also accelerated their investment plans ahead of the expiration of the temporary full expensing tax incentive on June 30.

Additionally, investments in building and structures surged due to mining projects related to resources such as lithium, used in batteries. Several previously delayed projects in non-mining industries also commenced during this period.

The construction industry experienced the most significant increase, with a rise of 30.5% in total capex following declines in the previous two quarters. This rebound was attributed to small businesses receiving vehicles and construction machinery after extended delivery delays.

For more detailed analysis, including industry and state-specific data, refer to the ABS report on New Capital Expenditure (cat no. 5625.0).