Drop in business investment casts doubt over Treasury predictions

The first significant fall in business investment in three years has cast doubt over Treasury and Reserve Bank predictions that the economy will be boosted in the year ahead by a revival in business spending. The housing boom is also starting to lose strength as developers confront falling sales, lower population growth, less immigration, and tougher lending conditions. While economists are still expecting the June quarter to show some growth, the loss of momentum in two of the largest drivers of economic growth may not achieve the three per cent rates predicted.

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