Businesses scale back investment plans
Plans for business investment are down, according to the latest Dun & Bradstreet Business Expectations Survey.The capital investment index level fell from 10.3 per cent in the March quarter to 8.7 per cent in the June quarter - its lowest point since the September quarter in 2014.The index subtracts "decreases" from "increases" to arrive at a net score: while 19.4 per cent of businesses expect to increase their investment level, 10.7 per cent expect to cut their investment spending (to arrive at an index level of 8.7 per cent).Respondents to the D&B survey said their actual capital investment activity fell during the past six months, from a net increase of 11.9 per cent in the December quarter last year to 7.3 per cent in the June quarter.The June quarter national accounts, which were released yesterday, also show a fall in business investment - down 1.9 per cent quarter-on quarter and 10.6 per cent for the year to June.Dun & Bradstreet economic adviser Stephen Koukoulas said: "Capital expenditure remains problematic, which is one part of the economy that the RBA and Treasury would like to see stronger."On all other measures business confidence was stronger. There were net increases in expectation for sales, prices, profits and employment."Altogether, business expectations are positive and suggest the economy continues to transition well from the end of the mining boom," Koukoulas said.