In the minutes of its August board meeting, RBA members noted improvements in commercial car sales and higher investment intentions as indicators of a strengthening business construction sector.
The board predicted that the decline in mining investment should “run its course” over the next couple of years, and after that, there should be no drag on growth.
It added that investment by non-mining businesses should also pick up in response to stronger demand.
“Businesses had continued to report above-average business conditions, and members noted that many of the conditions that might typically be associated with stronger growth in investment were in place,” the minutes said.
The board judged strengthened commercial car sales and the NAB survey which recorded higher investment intentions to be positive indicators of non-mining investment.
Board members, including RBA governor Philip Lowe and deputy governor Guy Debelle, said: “The pipeline of public infrastructure activity had increased over the previous few years to be at its highest share of GDP since the mid-1980s. The expected increase in expenditure on public infrastructure had been reported as flowing into the order books of firms in the private sector.”
However, the board noted that despite the increase in the level of non-residential building approvals, the amount of work to be completed was at low levels.