Business spending expectations fall

The latest report on the economic front this week was from the Australian Bureau of Statistics, reporting on capital expenditure expectations, and claiming that business spending expectations have fallen to a fifteen year low.

This is interesting considering that over the last three months, actual business investment rose by 8.8 per cent. It is also interesting when we bear in mind that Y2K costs will only increase as we approach 2000, and that this expenditure is diverting funds from other areas that, we would assume, will have that funding redirected back to after 2000.

With Reserve Bank predicting that the flat business investment market will be short lived, and the fact that those holding the purse strings in business rarely have the intention to actually spend money, we would want to see actual spending take a blow before we starting spouting doom and gloom.

Next News Economic Update