Australia Q2 Business Investment Slips 3.6% as Data Centre Boom Pauses
Australian business investment dropped 3.6% in Q2 as a record data centre buildout paused, though firms raised forward spending plans.
Australian business investment contracted in the June quarter, as a record surge in data centre construction temporarily cooled, according to official data released on Thursday.
The Australian Bureau of Statistics reported that private capital spending fell 3.6% in inflation-adjusted terms to A$50.95 billion (approximately $36.58 billion). The decline was far steeper than market expectations, which had forecast a modest 0.5% increase.
The drop was largely attributed to a 53% plunge in spending on information media and telecommunications equipment. This followed an unprecedented wave of investment in server racks and processing hardware for data centres in the previous quarter, the ABS noted.
Beyond the tech sector, spending on plant and machinery declined by 8.9%, while outlays on buildings and structures rose 2.1%.
Despite the quarterly setback, businesses signaled confidence in the months ahead. An ABS survey of firms revealed plans to spend A$200.7 billion in the year to June 2027, a 15.5% upward revision from the previous estimate.