Pacific research report predicts flat-lining of capital expenditure
24 May, 2019, 6:34 am
A NEW report released today predicts a flat-lining of capital expenditure over the next two years with a slowdown in private investment.
ANZ Bank’s research report Pacific Economic Outlook 2019 highlighted that private investment contributed to the bulk of investment, increasing its share from 45 per cent in 2013 to 56 per cent in 2018.
It stated major projects, such as the Amex Resources iron ore, Tuvatu gold mine, multi-story mixed purpose Friendship Plaza, Goodman Fielder chicken farm sheds, Sofitel Resort refurbishment and the start of the Pullman Nadi Bay Resort, Carpenters Fiji-sponsored Hilton hotels in Suva as well as the Damodar Brothers Labasa Complex contributed to activity last year.
The report noted that public investment in non-residential building and civil construction peaked at $214million in 2016.
According to the report since 2011, Fiji has had a boom in construction, with activity increasing across all the three categories of investment (dwelling building, non-residential building and engineering construction).
It said work done rose from an annual average of $225m over 2004-08 (inclusive) to $241m 2009-13 and nearly doubled to $467m more than 2014-18, respectively.
Meanwhile, it was also highlighted that new dwellings building, particularly the upmarket high-rise apartments, has probably run its course, therefore, the bank expected new residential investment to moderate after registering strong growth over the past two years.
It highlighted that public investment was forecast to moderate, as the government unwinds the fiscal stimulus and does some budget repair.