The big miss in forecast estimates of growth and the big deduction from growth in the September quarter was Private Fixed Capital Formation which fell 2.4% in the quarter on the back of the 6.7% drop in total non-dwelling construction.
This chart shows the solid contribution the sector has made to Australia’s GDP growth over the past 15 years but as the mining boom ends and three of the last five quarterly results have been negative, the dollar value of capital formation in the private sector looks like it could fall a long way.
Hopefully a lower Aussie dollar, the release of Glenn Stevens’ desired “animal spirits” and perhaps a rate cut or two can arrest the decline.
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