The rapid pace of business investment growth so far this year may be unsustainable, but there is little reason to fear anything worse than a modest slowdown any time soon. The near-term prospects for equipment investment still look bright and, although the resurgence in mining investment is now starting to fade, there are good reasons to expect other investment sectors to pick up some of the slack.
With capacity constraints starting to bite, historically low borrowing costs and a continued easing in lending standards should help to ensure that business investment continues to expand at a decent pace, keeping annualised GDP growth in a healthy 2.5%-3.0% range over the coming quarters.
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