Data centres ‘barely boosting’ Australia’s growth

Binaya Dahal

Journalist

24 June 2026

HSBC’s Paul Bloxham says Australia’s vast data centre construction boom has delivered little support to economic growth, as imports of high-value technology equipment have offset most of the investment gains.

Bloxham, chief economist for Australia, New Zealand and global commodities at $3.2 trillion multinational bank, said uncertainty also remains over how much the country’s rapidly expanding digital infrastructure build-out will ultimately contribute to productivity and national income.

“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,” he said.

“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.”

When measured in US dollars, Australia ranks sixth globally for data centres that are ‘live’, being built or in the pipeline, trailing only the United States, China, Malaysia, India, and Japan.

But Bloxham cast doubt on the extent to which the economic dividend would remain onshore.

“Will the build-out support local firms’ productivity? And, with high multinational ownership, how much of the return will stay in Australia?” he said.

“Exporting ‘compute’ to the rest of the world may lift GDP, but with high foreign ownership, much of the return may ultimately accrue to offshore. This risk has drawn parallels to Australia’s LNG exports.”

He further warned the country may not have enough cheap energy or water to support the current rate of planned data centre expansion.

“From here, a faster pace of AI will be needed to help to lift local productivity growth,” Bloxham said.

“Policymakers also need to have a keen eye on the rapidly shifting tech environment, given what it means for jobs, resource-use and the tax system, among other things.”