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Australia Investment Spending Jumps 14% on LNG, Deloitte Says
Australia’s business investment jumped 14 percent in the third quarter, led by liquefied natural gas projects in resource-rich states Western Australia and Queensland, a Deloitte Access Economics report showed.
Projects valued at A$406.8 billion ($434 billion) were committed or in progress as of Sept. 30, up A$49.8 billion from the previous three months, the Canberra-based research company said in a report today.
“Despite short-term economic uncertainties, projects continue to transition well from planning stages to under way,” the report showed. “A key aspect of Australia’s investment pipeline is a growing number of very large projects.”
In Western Australia, construction has been approved to start next month on the A$29 billion Chevron Corp. (CVX) Wheatstone LNG project, according to the report. In Queensland, the A$20 billion Australia Pacific LNG project by Origin Energy Ltd. (ORG) and ConocoPhillips (COP) has secured regulatory approval and is set to start later this year, it said.
Mining accounts for 34 percent of all investment projects currently under construction, according to Deloitte Access, which was founded by two former Treasury economists. For the next two levels of project status -- committed and under consideration -- mining accounts for most of the total value.
The rise of large projects -- longer-term investments that need to operate for extended periods so investors see a return on capital -- “reflects the level of confidence that investors have in the longer-term prospects” of the global and Australian economies, it said.
“Amid the extreme short-term volatility that we have seen on share markets and currency markets over the past couple of months, a continued focus on the longer-term picture by investors is comforting,” it said.
To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net
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