This week’s lockdown in Victoria demonstrates just how quickly out-of-date economic data can become. On Wednesday the latest GDP figures will be released showing a relatively rosy picture while at the same time many thousands of workers and hundreds of businesses in Victoria will be suffering because the federal government has effectively declared the pandemic is over.

It is rather bizarre that right now, despite a lockdown no different to ones experienced last year, the federal government has decreed that jobkeeper payments are no longer needed.

Apparently, all is well now.

Statewide lockdowns, which last year were clearly seen as potential causes of economic destruction deserving of federal government intervention, are now state government responsibilities.

I guess that was then; this is now.

And yet on Wednesday, when the relatively good news of the March quarter GDP figures comes out, you can bet on the Treasurer to talk a lot about how the job is not yet done and the recovery is still ongoing.

Ain’t that the truth.

As I noted last week, for all the good news about overall employment, private-sector work remains very much in recession.

While public-sector work has grown, the number of hours worked by people in the private sector was down 1.5% in the first three months of this year compared to the last three months of 2019:

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That is as bad as the worst falls that occurred during the GFC:

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And now we have our second biggest state going into a lockdown, without jobkeeper funds and the Morrison government instead wheeling out the minister for trade, Dan Tehan, to tell Victorians to go to Centrelink to see if they “might” be eligible for emergency payments they almost certainly will not be eligible for and which also have a seven-day waiting period.

So not helpful.

And it also means while looking at the latest GDP figures we will remain worried about what the June quarter figures will show in three months’ time.

One encouraging sign is the latest investment outlook for the 2021-22 financial year.

Every three months the bureau of statistics surveys firms on their likely infrastructure spending for the coming financial year. They ask how much they expect to spend on items like buildings and structures like roads, bridges and rail, and on machinery and equipment.

Last week, the second estimate for spending in 2021-22 showed a very big jump over the first estimate made at the end of last year:

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It was the biggest second estimate increase in non-mining firms’ expectations ever recorded – which is to say firms in the non-mining sector were a lot more optimistic in the first three months of this year than they were in the last three months of 2020.

That in itself does not mean a great deal because, of course, last year no one really had much to be optimistic about. Nevertheless, it is important because the non-mining sector of the economy is now a much larger source of investment than is the mining sector:

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But that does not mean we can forget about mining. The reason the non-mining sector is much larger is because it is made up of 16 separate industries!

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Even still investment is crucial because investment provides jobs.

If you are constructing new building and roads, someone has to do that work; if you are investing in new machinery and equipment, someone will be paid to use it.

Right now New South Wales is leading the recovery – the past six months has seen a 19% increase in private infrastructure spending in that state:

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The other reason investment is important is because when you look back at periods of strength in the economy, they have been times when private-sector investment – either through construction of dwellings, buildings or machinery and equipment – has been strong.

But in the period before the pandemic, the big driver of Australia’s private sector was exports – namely iron ore – a sector that does not provide a lot of jobs:

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Exports might help make our GDP figures look better, but it has a much lower link with jobs than does investment.

So it is good that the private sector was starting to feel more optimistic about investing.

But whether that optimism will hold if the lockdowns and border closures and concerns about the vaccination rollout continue is yet to be seen.

And it only serves to highlight just how precarious the recovery remains.