Downunder Digest Data centres, AI and Australia’s productivity

Research evidence excerpt

Downunder Digest Data centres, AI and Australia’s productivity

23 June 2026

Downunder Digest EconomicsAustralia

Data centres, AI and Australia’s productivity

◆ Australia has a data centre investment pipeline that is one of Paul Bloxham

the world’s largest ChiefCommoditiesEconomist, Australia, New Zealand & Global

HSBC Bank Australia Limited

◆ However, because most of the tech is imported, it has had paulbloxham@hsbc.com.au

+61 2 9255 2635

little net effect supporting near-term economic growth

Jamie Culling

Economist, Australia, NZ & Global Commodities

◆ Whether it lifts productivity is key and this depends on how HSBC Bank Australia Limited

quickly businesses adopt AI … so far, this has been slow jamie.culling@hsbc.com.au+61 2 9006 5042

Can tech save the day?

Amongst all the doom and gloom about Australia’s economy of late – around weak

productivity growth, a low economic ‘speed limit’, excessive inflation and a cyclical

downturn – one area has been booming: capital spending on data centres.

Not only has Australia’s data centre build-out been big, it is one of the world’s largest.

In USD terms, Australia ranks sixth in terms of data centres that are ‘live’, being built

or in the pipeline – behind the US, China, Malaysia, India and Japan. As a share of

the economy, Australia’s pipeline is comparable to the US’s.

However, the data centre capex boom is barely boosting GDP growth. This is

because much of the equipment – chips, hard drives, etc. – is imported, with these

imports offsetting nearly 85% of the positive GDP contribution from IT investment.

There is also uncertainty around just how data centres will support growth going

forward. For instance, will the build-out support local firms’ productivity? And, with