Australia is in a recession – but how bad will it get? This graph gives us a glimpse into our future, and it’s not pretty.
Capital expenditure is all the hard things businesses buy. Trucks, sheds, machines, office blocks, and computer hardware. Imagine a Bunnings. Capital expenditure doesn’t measure the hammers and drills they sell, it measures the cost to build the big green building and the carpark outside, to buy the cash registers, etc.
How much business expects to spend on capital this financial year, which has about 30 days to go. They now expect to spend 3.8 per cent less than they did when the ABS surveyed them late last year. One important caveat: the expected capital expenditure doesn’t cover education, and with many fewer international students, the education sector is in big trouble. So the reality could be even worse.Businesses are nervous about the future, and that nervousness can become a self-fulfilling prophecy. If they all hold back on their expansion plans, then the weak economy they all feared becomes manifest.
He referred to the moment when the JobKeeper and JobSeeker programs are due to end as a “critical point.” That is currently scheduled for September.
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