Investment matters, private expenditure, in particular.
It reflects confidence.
Where business invests, economic growth and jobs often follow.
People move to where there is work.
It is a ‘post-postmodern’ world.
Show me the money!
And our table speaks volumes.
|State or territory||Total
|Five year change|
Chain volume measures, original data.
Overall business investment is down by a third – from $167 billion during fiscal 2013 - to some $112 billion last financial year.
The biggest losers have been the resource states – WA, Qld and NT.
This stuff has teeth.
It is little wonder that Sydney and Melbourne have enjoyed the lion’s share of recent dwelling value appreciation and much of the job growth.
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Their wages have lifted too.
Recent analysis by HILDA shows that a typical Australian family, today, earns less than it did in 2009.
The median real disposable household income is about $76,250 today.
It was $77,500 prior to the onset of the GFC.
Two places, however, where real household incomes have increased over recent years have been in Sydney and Melbourne.
To mangle a great line from Hotel California – “many might want to check out, but most cannot leave”.
Recent data shows that Australian companies propose capital expenditure of $A101.8 billion in fiscal 2018.
This represents an increase of 17.6% on predictions made in June.
Whilst the lift is encouraging, it remains well below the long-term average.
More troubling is the lack of company interest in reinvestment, as many companies have ageing assets that need to be replaced.