been a gradual increase in the pace of growth of economic activity outside of the mining sector, owing in part to the very low level of interest rates. subdued investment ( outside the mining sector ) has been consistent with a period of greater uncertainty and below - average confidence. however, a number of indicators suggest that uncertainty has declined to levels seen prior to the global financial crisis. also, measures of business confidence have picked up over the course of the past year to be a bit above longrun average levels. while this is a welcome development, it may not be sufficient to spur investment if businesses ’ appetite for risk remains relatively low. moreover, the still - high level of the exchange rate may be weighing on investment of firms in the traded sector. nevertheless, there are tangible indications that non - mining business investment will grow at a modest pace this financial year. and if firms ’ willingness to take on risks improves, investment could easily be stronger still. it ’ s always hard to know if and when such a change in sentiment might occur. but it is more likely to do so when the fundamental determinants of investment are in place. the ready availability of internal and external finance, at very low cost, is one element of that. the stronger growth of demand across the non - mining parts of the economy over the past year or so is another. if history is any guide, eventually the period of elevated risk aversion is likely to give way to a concern among businesses, not of losses, but of lost opportunities and a loss of market share. survey ; for details, see berkelmans l and g spence ( 2013 ), “ realisation ratios in the capital expenditure survey ”, rba bulletin, december, pp 1 – 6. it is also worth noting that the capex survey provides only a partial read on non - mining business investment because it excludes firms from a number of key industries, including agriculture, health care and education ( which accounted for about 16 per cent of private non - mining business investment in 2012 / 13 ) and it excludes investment in intangible assets ( which accounts for about 15 per cent of total private business investment ). bis central bankers ’ speeches graph 1 graph 2 bis central bankers ’ speeches graph 3 graph 4 bis central bankers ’ speeches graph 5 graph 6 bis central bankers ’ speeches graph 7 graph 8 bis central bankers ’ speeches

global phenomenon. our liaison provides other evidence of a more cautious approach to investment over recent years. in particular, many firms now require investment projects to satisfy shorter payback periods and be approved at higher levels of management than was typical in the past. 9 other longer - term determinants? the current weakness in non - mining business investment may reflect the effect of some longer - run determinants of investment. one such candidate is ( multifactor ) productivity growth. relatively weak growth of productivity over much of the past decade would have weighed on the return to capital and reduced the incentives to add to the capital stock in nonmining industries ( graph 7 ). ( in principle, this effect should already be reflected in levels of tobin ’ s q. ) if productivity growth were to remain relatively low, that would weigh on overall growth of the economy. low growth of investment would naturally follow from low productivity growth, but it would not be the cause of weak growth of the overall economy. in any case, it ’ s hard to know exactly what productivity growth is likely to do in the future. more recently, multifactor productivity growth appears to have increased a little. it is currently not far from growth rates seen prior to the mid 1990s, which was a period of especially rapid growth. in summary, some of these explanations have more merit than others. external finance is generally readily available and at very low cost, so this can ’ t explain the weakness in nonmining business investment. looking at the available data, it ’ s hard to argue that heightened uncertainty is playing much, if any, role. rather, some combination of relatively low growth in domestic demand, the effects of the high exchange rate, a lack of confidence and a lower appetite for risk ( than in the past ) appears plausible. there are some metrics consistent with this, and it aligns too with what businesses say is holding them back. what do the data suggest about the future? the australian bureau of statistics capital expenditure ( “ capex ” ) survey provides a measure of firms ’ investment plans for up to 18 months ahead. 10 the saving rate has drifted down a little over the past couple of years, and the stronger growth of household credit of late suggests that there has been some pick - up in the appetite for risk among households. for a discussion of the experience of us firms, see sharpe a and g suarez ( 2014 ), “ the insensitivity of investment to interest rates : evidence from a