Data from Treasury showed business investment increased by 6.4 per cent in the 2022/23 financial year, higher than the estimated three per cent growth laid out for the same year in the last federal budget.
The growth was driven by a boost in new machinery and equipment investment after an easing of supply chain setbacks, despite tightening financial conditions and slower domestic activity.
Companies investing in items such as motor vehicles also led to new business investment rising by 2.1 per cent in the June quarter this year.
Treasurer Jim Chalmers said the new growth figures were encouraging.
"Weak business investment hurts our economy, so we are pleased to see it turning around on our watch," he said.
"While higher interest rates will likely weigh on business investment and growth in the period ahead, and many Australians are doing it tough, we're one of the best-placed economies to navigate these challenges."
Treasury forecasts have shown new business investment is set to slow to 2.5 per cent in 2023/24, before reaching two per cent in 2024/25, with the slowdown following tighter economic conditions under higher interest rates.
Non-mining investment is set to be the driver of new business growth in upcoming financial years, driven by a pipeline of infrastructure and other construction projects outside of home-building.
New investments in non-mining industries grew by 8.3 per cent in the 2022/23 financial year, while mining sector investment was at two per cent.
Separate surveying of manufacturers and service providers similarly points to a slowdown in private sector activity though the final quarter of 2023.
The Judo Bank flash purchasing managers index recorded the second month in a row of falling business activity, and the decline was the sharpest since August 2021.
Judo Bank chief economic advisor Warren Hogan said the findings "all but confirmed" a soft landing for the economy in line with the Reserve Bank's narrow path.
"Activity weakened Australia's services and manufacturing sectors in November," he said.
"Manufacturing remains soft, as it has been for most of 2023, although the sector does not appear to be slipping into recession at this stage."
The economist said the RBA would welcome the slowdown in business activity in November but price pressure signals embedded into the survey could be cause for concern.
"Specifically, the RBA will need to remain attentive to the risk that inflation does not fall as quickly or by as much as they would like to see," he said.
But he said the slowdown in business activity should bolster the case for patience on interest rates and give the RBA board space to stay on hold when it meets in December.
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