Work on big Tasmanian construction projects has slowed, while the NSW coronavirus outbreak and Australia's self-imposed isolation threaten to derail the national business investment recovery.
The longer we appear to the world as a closed and risk-averse society, the more likely investment dollars will head to other countries instead.Stephen Smith
That is according to forecaster Deloitte Access Economics.
Deloitte is remaining optimistic and forecasting investment will still grow this year, before speeding up.
"The outlook will depend on maintaining a high level of business confidence over the next year, as well as the speed at which COVID restrictions are eased," Deloitte Investment Monitor lead author Stephen Smith said.
"The longer we appear to the world as a closed and risk-averse society, the more likely investment dollars will head to other countries instead."
In Tasmania, Deloitte found engineering construction activity continued to slow.
"This has been led by the end of construction at several large renewable energy projects across the state," the report said.
"As a result, the value of work done in the electricity industry has fallen by almost 60 per cent from a peak in late 2019 to a trough in early 2021.
"The growth in the value of work done has also slowed in the road and water supply industries, which, together, account for one half of all engineering activity in the state.
"Looking ahead, the value of work commenced fell by one fifth over the past year, suggesting that activity may remain subdued over the short term."
The report said Tasmanian commercial construction activity slowed in the past year.
"But this may be short-lived, with both the value of work commenced and building approved increasing at double-digit rates," it said.
Deloitte said construction activity was set to strengthen in Tasmania's retail, education, accommodation and entertainment and recreation industries.