Australians appear to be spending more at the shops and the economy is bracing for a housing construction boom.
But a prominent independent forecaster warns this good news is “not quite good enough” on its own.
Deloitte Access Economics says a key component in the transition away from resources investment spending – non-residential spending – “is yet to stir”.
Its latest quarterly Investment Monitor says the pipeline of proposed projects remains impressive, but the lack of new plans is becoming apparent – that is, the value of definite investment continues to outweigh planned work.
Deloitte partner Stephen Smith says engineering activity has been static for close to two years.
“That is unlikely to be true from much longer … the modest fall in engineering is set to accelerate,” he said.
The total value of projects in its Investment Monitor database as of March was $878.8 billion, a 1.4 per cent increase on the previous three months, but down 5.4 per cent from a year earlier.
Definite projects – those under construction or committed – totalled $442.3 billion, while planned projects – those under consideration or possible – were valued at $436.5 billion.
Deloitte expects overall economic growth to remain stuck below its long term average of just above three per cent through to late 2015, despite retail spending and housing construction responding to low interest rates.