CONFIDENTIAL # Z
3
Table 1
terms.
On investment in property, the statistics
on building completions and on consents to commence work provide the best up-to-date indicators.
Investment in plant and machinery
(all growth rates quoted in this section are on year-on-year basis)
3.
(a) Capital expenditure on plant and
machinery
The latest quarterly GDP estimates show that overall capital expenditure on plant and machinery (including retained imports and local production) grew by 28% in real terms in the second quarter of 1987. The corresponding growth rate in the first quarter was also strong, at 24%. These growth rates represent a substantial pick-up from the growth rate of 10% in real terms recorded for 1986 as a whole (Table 1). Current indications are that the forecast growth rate of 25% in real terms for capital expenditure on plant and machinery in 1987, as announced in the Financial Secretary's Mid-year Speech, should be achieved.
4.
The private sector plays a predominant role in investing in plant and machinery. Its share of this type of investment amounted to 98% in 1986, while in 1985 the figure was 96%. Expenditure on plant and machinery by the private sector grew by 28% in real terms in the second quarter, compared with increases of 11% in 1986 as a whole and of 24% in the first quarter of 1987. For the public sector, which accounted for only 2% of the overall expenditure on plant and machinery,