The big story from today’s private investment data from the Australian Bureau of Statistics isn’t the surprise 3.9% fall in the September quarter.

No, it was the size of the investment boom re-gathering in the economy.

The ABS said there was a 3.9% fall in the seasonally adjusted estimate for total new capital expenditure (in volume terms). That was after a reported rise in the June quarter of a revised 2.1% (originally 3.3%).

The market had been looking for a rise of 1.1%.

The fall was driven by declines in the seasonally adjusted estimates for buildings and structures, down 4.8% and the for plant and machinery, down 2.9%.

But the ABS data also looked at the change in investment decisions and that’s where the coming surge is showing up.

The $105.01 billion estimate in this set of figures is 7.7% lower than the equivalent estimate 4 for the 2008-09 financial year, but that was an improvement on the 10.4% fall in the third estimate issued in the June quarter data.

The ABS said the contributors for this were mining (-15.1%), manufacturing (-10.1%) and rental, hiring and real estate services (-8.7%).

But this estimate is 5.9% higher than estimate 3 for 2009-10.

“By major industry group, the key contributor to this rise was the total for other selected industries (7.7%). Manufacturing rose 6.4% and mining rose 3.2% between these estimates,” the ABS said.

It was the second quarterly fall in the past two years and won’t concern the Reserve Bank, which would have noted the sharp rise in the ABARE estimate for current mining projects to $113 billion.

That was due to the green light for the huge $43 billion Gorgon LNG project.

Reserve Bank deputy governor Ric Battellino said in a speech in Melbourne yesterday that: “Over the next few years, Australia is also expected to see a further expansion of the resources sector, including the development of some very large gas projects.

“Mining investment, which is already at record levels as a share of GDP, could rise substantially further in the next five years or so.”

The boom is out there, gathering strength.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey