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