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- CAPEX to pick up, despite the move to services: 2024 Annual national accounts
CAPEX to pick up, despite the move to services: 2024 Annual national accounts
By Pat Bustamante
Senior Economist, Westpac
10:30 November 28 2024
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The economy is undergoing once in a generation structural changes. Industries at the forefront of these shifts are boosting their capital stocks. These changes also mean trend investment growth will be higher going forward, even as we become a more services based economy.
CAPEX to pick up, despite the move to services. 2024 Annual national accounts (PDF 805KB)
The economy is undergoing once in a generation structural changes (including the transition to net zero emission), which are supportive of capex. This has already boosted capex in several industries at the forefront of these changes.
As we become a more services-oriented economy, the adoption of and investment in new technologies will grow in importance. This leads to the surprising result where year-to-year investment growth is likely to be higher compared with a more traditional manufacturing-based economy.
We expect this to boost underlying growth in capex as obsolete technology will need to be replaced more regularly, adding at least ½ppt per year to investment growth in the non-mining market sector over the next decade.
In contrast, the non-market sector is becoming more labour-intensive. The international experience suggests that here too technology has a role to play.
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