Greg Jericho
Chief Economist

The latest “Private New Capital Expenditure” (Capex) figures released today are the first of a series of data out over the next week that leads up to the GDP figures next Wednesday.

These cover business investment in either building and structures or machinery and equipment.

In the September quarter total new capex rose 6.4% in volume terms (ie accounting for inflation), and non-mining capex went up 8.6%. This meant overall new capita expenditure was at the highest level since March 2015, when the mining construction boom was about to end:

What we are seeing at the moment is not a boom in mining capex, but non-ming, and specifically Info media and IT, and even more specifically datacentres for AI. Over the past year new Capax in the Infor media and IT industry accounted for 64% of the total increase in capex across all industries. That’s pretty surprising given that industry is pretty small – usually accounting for about 6% of all investment.

But what is happening now is very unusual:= – a doubling on investment compared to 2 years ago

So anyone wondering if governments have time to wait before thinking about AI an the impact on energy supply and use and all other manner of issues, the answer is no.