Business Statistics: GFCF and GDP Analysis

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STA510 Business Statistics Semester 1 2019

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The data has been collected from Australian Bureau of Statistics (Abs.gov.au, 2019).Table 1: First 10 rows of the dataset PRIVATE GROSS FIXED CAPITAL FORMATION -
MACHINERY AND EQUIPMENT (GFCF) and GROSS DOMESTIC PRODUCT (GDP) for the
period March 1986 to December 2018
Source: Australian Bureau of Statistics (ABS) website
Answer 2:
a) GFCF - MACHINERY AND EQUIPMENT and GDP in $Million are studied with their
time series plot and histogram.
From Figure 1, the trend of GFCF - MACHINERY AND EQUIPMENT can be identified.
Fluctuations in GFCF are noted to increase September 2005 onwards. An overall and gradual
increase in GFCF over the time period of the research is noted. From Figure 2, a bimodal
nature of the distribution of GFCF can be identified, with two peaks at $6701 (Million) and $

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18701 (Million). The distribution is noted to be almost normally spread (Selvanathan,
Selvanathan and Keller, 2017).
Figure 1: Time Series Plot for GFCF ($ Millions)
Figure 2: Histogram for GFCF ($ Millions)
From Figure 3, the trend of GDP can be identified. Fluctuations in GDP are noted to be
consistent. A sharp increase in GDP over the time period of the research is noted. From
Figure 4, the nature of the distribution of GDP can be identified, with a long right tail. The
distribution is noted to be right skewed.

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Figure 3: Time Series Plot for GDP ($ Millions)
Figure 4: Histogram of GDP ($ Millions)
b) A two-way scatter plot has been drawn to assess the linear association between GDP
(Gross Domestic Product) on GFCF (Machinery and Equipment). The scatter plot has
been presented in Figure 5. A strong positive correlation can be noted from the
scattering of the data. GFCF has been considered as the independent variable, and GDP
is taken as the dependent variable. GDP is noted to increase sharply with increase in
GFCF.