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Highlights
- The ABS reported an increase of 1.4 per cent in payroll jobs in the fortnight up to 30 October 2021.
- The latest data shows that capital expenditure by private businesses declined to AU$32.7 billion in the September quarter.
- The ABS estimates an increase in private capital expenditure in 2021-2022.
Although Australia’s economic recovery has been riddled with a range of challenges, the nation is gradually emerging out of the adversities caused by the pandemic. One such step in the positive direction has been the reported increase in payroll jobs in the fortnight up to 30 October 2021. Meanwhile, estimates on business expenditure for the upcoming financial year have also risen considerably.
The Australian Bureau of Statistics (ABS) recently reported that payroll jobs increased by 1.4 per cent in the fortnight up to 30 October 2021. The biggest change in payroll jobs was seen in the Australian Capital Territory, where the statistic rose by 4.4 per cent during the same period. However, the largest share of this increase in payroll jobs belonged to Victoria, with a share of 47.8 per cent.
The increase in payroll jobs is yet another indication that the labour market is strengthening post the observed increase in wages. This labour market improvement indicates a slow and gradual recovery from the Delta variant outbreak, which had left national businesses crippled due to lockdown restrictions.
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Business investment to improve
The latest release by the ABS on the quarterly change in investment suggests that the private capital expenditure fell by 2.2 per cent in the September 2021 quarter. The capital expenditure by private businesses plummeted to AU$32.7 billion in the last quarter, majorly reflecting the slowdown in business activity during the Delta variant outbreak.
Moreover, expenditure on buildings and structures fell by 0.2 per cent during the period and so did the expenditure on equipment, plant, and machinery, which recorded a fall of 4.1 per cent. The capital expenditure on mining rose by 1.2 per cent, while capital expenditure on non-mining plunged by 3.4 per cent.
Interestingly, the ABS estimates that the total private capital expenditure is set to increase over the coming months. In 2021-22, the total expenditure is anticipated to increase to AU$138.6 billion.
During the September quarter, the expenditure on buildings and structures stood at approximately AU$17 billion. However, the capital expenditure on equipment and machinery stood at about AU$16 billion during the quarter.
It is worth noting that business investment plays a crucial part in the growth of the economy. As business owners put more money into their ventures, it results in greater productivity. Thus, increased jobs and improving capex figures are considered positive signs for an economy. This is crucial in the current context where supply chain disruptions are affecting businesses across the globe.
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