Labor’s investment boom survives a data-centre hangover
Private capital expenditure fell in June, but the headline masks strong annual growth, rising investment intentions and an extraordinary data-centre investment cycle.
The ABS quarterly capital expenditure survey measures new private business spending on buildings and structures, and equipment, plant and machinery. Its June-quarter actual expenditure figures are measured in volume terms, meaning the effects of price changes have been removed.
On the headline number, private capital expenditure fell 3.6% in the June quarter. But that figure gives a misleading impression of the underlying investment cycle.
Trend capital expenditure actually rose 1.6%, while total real investment remained 10.7% higher than a year earlier.
The main explanation is data centres.
Information Media and Telecommunications equipment expenditure fell 53.0% during the quarter, but only after soaring 199.6% in March, when the ABS recorded record investment in server racks and processing equipment for data centres. Buildings and structures expenditure, meanwhile, rose 2.1%, partly because data-centre construction continued.
Politically, this means Treasurer Jim Chalmers’ recent claim that business investment was “booming under Labor” has survived the June numbers reasonably well.
Investment intentions are also encouraging. Expected capital expenditure for 2026–27 has reached $200.7 billion. Compared with the equivalent Estimate 3 for 2025–26, that represents an increase of about 14.8%, with non-mining intentions up around 18.5%.
But the strength is far from universal.
Over the year, investment increased 76.8% in Information Media and Telecommunications, 29.4% in Construction and 20.9% in Transport. By contrast, it fell 5.0% in Manufacturing, 9.8% in Professional, Scientific and Technical Services and 17.6% in Financial and Insurance Services.
Australia therefore has a genuine investment upswing — but much of its strength remains concentrated in digital infrastructure and a relatively narrow group of sectors.
| Industry | Quarterly change | Annual change |
|---|---|---|
| Information Media and Telecommunications | −30.2% | +76.8% |
| Construction | +16.1% | +29.4% |
| Transport, Postal and Warehousing | +16.5% | +20.9% |
| Arts and Recreation Services | −11.8% | +20.5% |
| Other Services | −1.0% | +18.0% |
| Electricity, Gas, Water and Waste | +5.5% | +12.6% |
| Rental, Hiring and Real Estate | +3.9% | +9.5% |
| Health Care and Social Assistance | −7.4% | +4.6% |
| Mining | +1.6% | +2.6% |
| Education and Training | −7.3% | +1.3% |
| Wholesale Trade | −4.1% | +1.0% |
| Administrative and Support Services | +9.8% | +0.6% |
| Industry | Quarterly change | Annual change |
|---|---|---|
| Financial and Insurance Services | −8.2% | −17.6% |
| Professional, Scientific and Technical Services | −12.0% | −9.8% |
| Manufacturing | +1.0% | −5.0% |
| Retail Trade | −8.6% | −4.1% |
| Accommodation and Food Services | −7.1% | −1.7% |