Week in Finance

Sean Ford SPENDING SLIDE

Nov 30 2012

Business capital spending in Tasmania is declining, but growing nationally. Tasmanian private new capital expenditure fell to its lowest quarterly level since late 2010 in the three months to the end of September in trend terms, according to Australian Bureau of Statistics figures. The $13 million fall to $261 million was a third successive quarterly decline, from a high of $315 million in the December quarter last year. Spending on plant and equipment fell for a fourth successive quarter to $216 million. Spending on buildings and structures was down $8 million to $44 million and had been declining for three quarters. Nationally, September quarter new capital expenditure was up 3.8 per cent for the quarter, in trend terms, and up 19.8 per cent on the September quarter of 2011. The spookiest bit for Tasmania was the real value of private new capital expenditure was down 16.3 per cent year on year, according to State Treasury analysis. Victoria (-6.4 per cent) and New South Wales (-1.5 per cent) were the only other jurisdictions to go backwards in that time and the Australian figure surged ahead by 19.8 per cent. CONSTRUCTION BLUES ABS data on building and engineering construction work done in the September quarter showed Tasmanian spending down 0.4 per cent for the quarter, against a 2.6 per cent national increase. Only Victoria did worse than Tasmania on this measure. This work peaked in 2010 in Tasmania, which would have been the height of the school building surge. Put simply, the state needs some extra private sector projects, and projects of some size.