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FINANCING RESOURCES AND INVESTMENT, ORIGINAL, CURRENT PRICES
During June quarter 2015, non-financial corporations and households invested $54.2b and $35.2b respectively in capital formation. Non-financial corporations funded these investments mainly through gross saving ($42.3b) and net borrowing ($18.8b). Households funded their investment through gross savings ($37.2b) and remained a net lender ($2.2b) to other sectors. The general government sector invested $16.9b in capital formation funding it mainly through gross savings of $8.9b.
Graph 1. Total capital formation, current prices
In original terms, national capital formation investment increased $12.3b from the March quarter 2015 estimate to reach a total of $108.9b in June quarter 2015. The increase was driven by a $14.6b rise in gross fixed capital formation, which was slightly offset by a $2.3b decrease in change of inventories.
Private non-financial corporations gross fixed capital formation has fallen since peaking in June quarter 2013 ($59.8b), this has been driven by decreased non-dwelling construction investment. Conversely, household sector gross fixed capital formation has continued to grow since March quarter 2013 ($26.7b), this has been driven by increased investment in dwellings.
Graph 2. Net financial investment (Net lending (+) / net borrowing (-))
Source(s): Table 4. National Financial Assets and Liabilities ($ million); Table 6. Financial Assets and Liabilities of Non-Financial Corporations ($ million); Table 14. Financial Assets and Liabilities of Financial Corporations ($ million); Table 27. Financial Assets and Liabilities of General Government ($ million); Table 33. Financial Assets and Liabilities of Households ($ million)
During June quarter 2015, national net borrowing was $15.7b, driven mainly by non-financial corporations borrowing of $18.8b. By contrast, the financial corporations and household sectors lent $2.3b and $2.2b to other sectors respectively.
Net borrowing of $18.8b by non-financial corporations was a result of incurring $24.7b in liabilities and acquiring $5.9b in financial assets. Private non-financial corporations incurred $23.4b in liabilities during the quarter driving increases in total liabilities of the non-financial corporation sector. The increase in liabilities of the private non-financial corporations sector was driven by issuance of equity of $21.4b coupled with bond issuances of $18.4b. This was partially offset by loan repayments of $11.4b. The private non-financial corporations sector drove the increase in financial assets with net acquisition of $6.7b during the quarter. This activity was predominate in the unlisted equities market with private non-financial corporations acquiring a net $8.4b in shares and other equity.
Net borrowing of $1.4b by general government was a result of incurring $3.9b in liabilities while acquiring $2.5b in financial assets. The general government incurred liabilities through issuance of Commonwealth government bonds ($6.8b) offset by loan repayments by the state and local general government (-$4.0b). A net transaction of $2.5b in unfunded superannuation also contributed to general government liabilities. The general government acquired financial assets through placements made by the state and local general government ($6.7b) which was partially offset by deposit withdrawals by the state and local general government (-$4.6b).
Net lending of $2.3b by the financial corporations sector was a result of acquiring $27.7b in financial assets while incurring $25.4b in liabilities. The financial corporations sector acquired financial assets through loans ($65.7b) which was partially offset by derivative settlements of -$41.6b. Financial liabilities were incurred through an increase in net equity in reserves ($30.5b), acceptances of deposits ($11.7b) and accounts payable ($9.4b), this was offset by derivative settlements of -$37.8b.
Net lending of $2.2b by households was a result of acquiring $46.0b in financial assets while incurring $43.8b in liabilities. Financial assets were acquired through increases in net equity in reserves ($32.4b) and deposits with banks ($7.9b). Households incurred financial liabilities through borrowing of long term loans ($38.1b).
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