NSW investment booming: Pete Wargent
Pete WargentDecember 17, 2020
EXPERT OBSERVER
Actual investment was quite flat over the third quarter of the calendar year at a seasonally adjusted $29.4 billion, while fortunes have diverged significantly around the traps, according to the latest data from CapEx.
In the economic powerhouse state of New South Wales the quarterly trend investment for private capital investment tore 12 per cent higher over the year to September 2018 to a record high of $8.22 billion.
No wonder Greater Sydney has created almost 120,000 new jobs on a net basis over the past year, with plenty more coming down the pipe!
Building and structures investment exploded 20 per cent higher over the year in NSW, while plant and equipment investment was up by a pretty solid 5 per cent.
Huge investment numbers for the Premier State.
There was also steadier trend growth in Victoria, South Australia, and Queensland, while Tassie was off the charts with capital investment up by a ripping 33 per cent over the year to September, albeit from a low base in this cycle.
Unfortunately this was offset by shrinking investment in Western Australia - the quarterly trend now a walloping 62 per cent below the heady 2012 peaks - while Ichthys LNG investment has now dropped off the charts for the struggling Northern Territory.
On the plus side a number of iron ore and other resources projects are now hoving into view for WA, so from a sentiment perspective the bottom is now likely to be in out west.
Brighter times ahead
Despite the modest actuals the Reserve Bank will surely be well pleased with this release, with the fourth estimate for 2018-19 capital investment rising all the way up to $114 billion, a substantial double-digit lift from the third estimate of $102 billion.
We haven't seen a quarterly upgrade in expectations of this magnitude for just shy of two decades.
The additional investment is planned and expected largely for the services industries, although investment in both mining and manufacturing also appears set to rise.
Overall, it was a sluggish result for actuals due to the seemingly endless drag from the resources jurisdictions, but Sydney is firing and the expectations for investment recorded a solid improvement.
PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.
Pete Wargent
Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.