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Australia First-Quarter Capital Outlays Rise on Data Center Building

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Australia First-Quarter Capital Outlays Rise on Data Center Building

Boosted by construction and installation of data centers, Australia's private-sector capital outlays in the first quarter rose to the highest level in nearly 12 years, reported the Australia Bureau of Statistics (ABS) on Thursday.

The nation's private-sector capital outlays struck a seasonally A$52.6 billion in the the first quarter, up 6.5% from the fourth quarter, and up 14.6% on year, said the ABS.

In general, private-sector capital outlays refer to expenditures in business buildings, plant and equipment, but also refer to items such as software or patent acquisition. This spending creates or amplifies a business asset, increasing overall operational capacity or efficiency.

Higher capital outlays are considered a positive, a sign of business confidence and promise for greater productivity in the private sector.

As in many other economies, private-sector capital outlays in Australia in the first quarter rose on the back of higher expenditures on data centers.

The jump in overall capital outlays was the result of "investment in data center equipment, specifically server racks and processing equipment, significantly boosting overall investment figures," said an ABS official, in a prepared statement.

Australian first quarter private-sector investment in information media and telecommunications rose 96.1% from the fourth quarter, reaching a new sector record-high level, and the largest surge of any industry grouping, reported ABS.

Australian enterprises also expect to continue to boost capital outlays in the seasons ahead.

"Businesses revised their expected capex (capita expenditures) for 2026-27 to be up by 9.9% on the first estimate last quarter," said the ABS, largely citing planned spending on data centers.

The ABS also reported that total all-industry capital outlays in plant and equipment rose 18.1% in the first quarter from the fourth, and gained 31% on year, while outlays on buildings declined 3.8% on quarter, but were still up 0.8% on year.

Australia's first-quarter capital outlays were the highest on record excepting levels posted in 2012, during the peak of a mining and oil-and-gas resources investment boom.

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