Business investment to add to recovery

New figures are expected to give weight to the federal government’s claim its policies are driving up business investment.

The Australian Bureau of Statistics will on Thursday release private capital spending data for the March quarter, as well as new figures on business investment intentions.

Prime Minister Scott Morrison told parliament on Wednesday lower taxes and investment incentives were flowing through as part of the government’s recovery plan.

St George chief economist Besa Deda says so far consumers have been the engine room behind Australia’s faster than anticipated recovery.

“Businesses have been reluctant to enter the engine room, but this is starting to change and will shift further as we move through this year,” she says.

Economists are forecasting a 2.1 per cent rise in capital expenditure for the quarter.

The quarterly result will feed into the March quarter economic growth figures contained in the national accounts, which are due on June 2.

What is known so far for the March quarter is that retail spending will make a modest drag on growth, while construction activity, and particularly home building, will make a contribution.

Figures on Wednesday showed residential building activity struck a six-year high.

Economists will finalise their growth forecasts after next Tuesday’s release of figures for international trade, business profits and inventories, and government spending for the March quarter.

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