Data centre boom pushes machinery, equipment investment growth to fastest since 1992: Westpac
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More news: The growth in private capital investment in machinery and equipment has hit 18%, its fastest quarterly growth rate since the 1992 December quarter, but only ticked up a “modest” 1.2% if data centres are excluded, according to Westpac economists.
The growth in machinery and equipment investment was led by a 196% quarter on quarter increase in information and telecommunications investment. However, they noted that investments in buildings and structures fell 3.8% in the quarter despite some offsets from data centre construction.
In a research note, Westpac economists Pat Bustamante and Luka Belobrajdic said that “despite our view that data centres would lead a strong result in the quarter, today’s outcome exceeded even our top of the range expectation for a 4.0%qtr rise, with market consensus far more subdued at 1.0%qtr”.
However, they noted that high capital investment “should translate only partially into GDP, with a significant share leaking abroad”.
Capex rises 6.5% in March quarter on surging data centre investment: ABS
The news: Private new capital expenditure rose 6.5% in the March quarter, representing a 14.6% jump from the prior corresponding period, according to the latest figures from the Australian Bureau of Statistics.
The context: The spike in spending was driven by a surge in data centre investments, building on a similar increase recorded in the September quarter of 2025. Information media and telecommunications recorded the largest industry rise, up 96.1%, reaching a new record level, while non-mining business investment rose 8.8%.
Capital expenditure fell 3.8% for buildings and structures. This was weighed down by a 4.3% drop in non-mining and a 2.9% slide in mining, driven by major projects reaching completion, particularly across manufacturing, electricity, gas, water and waste services and mining, according to ABS head of business statistics Tom Lay.
Businesses also upgraded their capital expenditure outlook, revising their expected spending for 2026-27 up by 9.9% compared to the initial estimate last quarter.
The sources: ABS, ABS, Westpac research
