Australia’s business investment rose last quarter, spurred by projects in the state of Queensland, even as weaker commodity prices sparked a drop in sites under consideration, a Deloitte Access Economics report showed.
The value of projects under construction or committed climbed 3.8 percent to A$461.7 billion ($481 billion) as of Sept. 30 from the prior quarter, the Canberra-based research company said in a report released today. In contrast, a lack of new plans and some cancellations resulted in the value of projects categorized as under consideration or possible falling A$10.6 billion to A$465 billion, Deloitte said.
“For the construction leg of the mining boom, the summit is now approaching,” according to the report, which predicted a peak in 2014. “What has been the big growth driver of the Australian economy over recent years -- business investment -- will be now somewhat absent.”
The Reserve Bank of Australia last week reduced its 2013 economic growth forecast as lower spending in iron-ore, coal and natural-gas projects restrains the economy. It cited the local currency’s sustained strength -- even as commodity prices dropped last quarter -- as a factor in decisions by mining companies to put off some investment.
BHP Billiton Ltd.’s delay of a decision on the Port Hedland outer harbor iron-ore expansion for at least 12 months reflects concern about the future demand for Australia’s key export, Deloitte said. The price of iron ore, which made up more than 20 percent of Australian exports last year, dropped as much as 37 percent last quarter before recovering in recent months.
“While the quantum of projects in planning has moderated a little over the past year, some of those on the drawing board may be further from the green light now than they were three or six months ago, given the downturn in global commodity prices and concerns over China’s development path in the short term,” Deloitte said.