Face of Nation : Deloitte Access Economics has made the prediction in its latest quarterly report on investment in projects throughout the nation. The report shows the value of investments in progress in Australia rose by 3.5 per cent to $713.8 billion in the three months to June.
Government spending has more than pulled its weight, with the federal and state governments spending record amounts on infrastructure. The picture has been a little less rosy for the private sector, where the number and value of projects added to the pipeline dipped in the June quarter.
The leading forecaster expects private business investment will ultimately grow by just 0.2 per cent in 2019, making virtually no contribution to economic growth.
At the same time, public investment is expected to grow by 5.4 per cent, adding 0.2 per cent to growth across the economy. But Deloitte expects private business investment will pick up in the next two years, with 4.4 per cent growth in 2020 and 8.8 per cent growth in 2021. There are, however, some challenges to that outlook, with capacity utilisation – the extent to which organisations use their productive capacity – faded alongside growth in the past year. Politicians could also lead to businesses keeping their purses tight.
“Although it may be less of an issue in Australia than is true globally, there are doubts as to the ability of politicians to deliver a stable policy environment in which to do businesses,” says the report, released on Thursday. “The more political uncertainty that exists in the economy, the slower that any recovery in capital expenditure will be.”
New South Wales, Victoria and Queensland now account for more than three-fifths of all definitive project investment, their highest share since Deloitte started keeping records in 2001.
