“Capital spending outside of mining is considerably weaker now than I would have expected,” Reserve Bank governor Glenn Stevens told the House economics committee earlier this month.
…Hardship in the traditional manufacturing sector has been one factor, with the surging currency during the mining boom leading to the plant and factory closures (next in line, the auto industry) that won’t be restarted.
Companies have also been overly generous in returning cash to shareholders, with dividends rising 12.4 per cent over the year, rather than investing for future growth.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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