Business investment fell by 1.6 per cent during the March quarter, weighed down by a drop in private spending on equipment, plant and machinery.
Seasonally adjusted data released by the Australian Bureau of Statistics on Thursday showed total capital expenditure of $27.69 billion in the three months to March.
The number was lower than market expectations for a 3.0 per cent decline but private capital expenditure is still likely to be a drag on next week’s GDP data.
The period covered included the effects from the summer bushfires but does not reflect much impact from the coronavirus related shutdowns, which were imposed in late March.
It follows a 2.6 per cent decline in business investment during the December quarter.
Expenditure on buildings and structures fell 1.1 per cent in the March quarter to $14. 70 billion but spending on equipment, plant and machinery dropped further, down 2.3 per cent to $13.27 billion.
The ABS data also signals that Australian companies spending plans are set to be scaled back.
Businesses collectively expect to invest $115. 4 billion in 2019/20, which is 3.8 per cent lower from three months ago and 5.6 per cent lower from a year ago.
During the 2017/18 financial year, businesses collectively expect to invest $114.6 billion, which is 2.5 per cent higher than the corresponding estimate made at the same time last year.
Plans for 2020/21 are even more stark, likely reflecting the economic downturn following the COVID-19 lockdowns.
Businesses plan invest just $90.89 billion for the year, down 8.8 per cent from three months ago and a fall of 7.9 per cent from last year.
By 1215 AEST, the Australian dollar was at 66.29 US cents, slightly higher from the 66.19 level immediately before the release.