Former Reserve Bank governor Glenn Stevens once told parliamentarians that the Australian business community was lacking the “animal spirits” that were needed to drive economic growth.

Six years on, little appears to have changed.

Business investment fell further in the September quarter to stand almost 14 per cent lower than a year earlier.

While firms have upgraded their spending intentions for this financial year, they are not as strong as economists had been hoping for, particularly in the light of last month’s federal budget that contained a number of investment incentives.

“The outlook for business investment is weak – although not as weak as three months earlier,” Westpac senior economist Andrew Hanlan said.

Private capital expenditure dropped three per cent in the September quarter to $25.9 billion, double the decline economists had been expecting.

The Australian Bureau of Statistics data released on Thursday also showed investment plans have been upgraded to almost $105 billion for the 2020/21 financial year, 6.3 per cent higher than estimated three months ago.

But when compared to a year ago at this stage, spending estimates are 10 per cent lower.

RBC Capital Markets head of strategy Su-Lin Ong suspects policy makers will be somewhat disappointed with these results.

“They suggest that the animal spirits have yet to stir much,” Ms Ong said.

“Given the tumultuous year that 2020 has been, coupled with still ongoing uncertainty, it may well take some time before policy measures designed to support investment garner more traction and it will also demand sustained business confidence.”

She said strong business investment is critical to lift growth.

In the September quarter, investment in buildings and structures fell 3.7 per cent to $13.8 billion, while spending on equipment, plant and machinery declined 2.2 per cent to $12.1 billion.

The figures feed into next Wednesday’s national accounts for the September quarter, and will also take into account this week’s equally disappointing construction figures for the quarter.

Even so, economists are still expecting a positive growth outcome, largely as a result of a bounce back in retail spending as COVID-19 restrictions were eased, as well as a recovering employment market.

Forecasts are for an expansion of between two and four per cent for the quarter after the massive seven per cent contraction in the June quarter that marked the first recession in nearly 30 years.

Economists will finalise their forecasts after quarterly reports for company profits and inventories, international trade and government spending early next week.

Meanwhile, Business Council of Australia chief executive Jennifer Westacott has told a conference to really move the nation forward there needs to be a 30-year infrastructure plan.

She said as a first step the Commonwealth and states should agree on the extent of national public infrastructure projects needed and develop a strategic pipeline.

“Infrastructure can transform a place,” she told the Sunshine Coast Business Council forum.

“They not only create thousands of jobs, but they change the nature of the economy, especially outside our major capital cities.”

She said whether it is a major road or rail project, a port or airport facility, improving infrastructure means more effectively getting goods and services around the country and on to lucrative export markets.