Business investment surged in the March quarter, but the headline number is flattering. This is a data centre story, not a broad-based investment recovery.
🖥️ Total capex rose 6.5% QoQ (up from 0.4% prior quarter)
🖥️ Annual growth was 14.6% YoY
🖥️ Equipment, plant and machinery rose 18.1% QoQ
🖥️ Buildings and structures fell 3.8% QoQ (down from +2.3%)
🖥️ Non-mining investment rose 8.8%, mining was flat
🖥️ Information media and telecommunications rose 96.1% to a new record level
🖥️ Estimate 2 for 2026-27 capex is $173.4 billion (9.9% above Estimate 1)
The ABS was unusually explicit about what drove this result. It was data centre equipment. Server racks and processing equipment. This is the global AI infrastructure buildout showing up in the Australian capex numbers, and it builds on a similar spike in the September quarter 2025. The information media and telecommunications sector nearly doubled its investment in a single quarter.
The problem for anyone reading this as a sign of broader economic strength is that this investment is overwhelmingly import-intensive. Most of this equipment is manufactured overseas and shipped in. That means the capex surge will be largely offset by a corresponding rise in capital goods imports when the national accounts are published next week. The net contribution to GDP is likely to be much smaller than the headline suggests. For SME owners looking at this number and wondering if conditions are improving, the honest answer is that this investment boom is passing through the economy rather than feeding into it. It's not creating a domestic multiplier. It's not generating broad-based demand. The businesses benefiting are a narrow slice of the economy servicing a global technology theme. The rest of the economy, as today's household spending figures show, is heading in the other direction.