Data centre investment in NSW and Victoria exceeds 2010s mining boom peak

Private companies and individuals spent almost $300 billion on new buildings, equipment, machinery and homes in NSW and Victoria over the past 12 months. The figure exceeds the $250 billion peak recorded in Western Australia and Queensland during the 2012-13 mining investment period.

Through the first three months of 2026, spending on equipment and machinery in NSW reached a national record of $12 billion. Victoria recorded a state record of $9.1 billion in the same category.

Economic contribution Cabinet secretary and assistant minister for the digital economy Andrew Charlton said the surge prevented national economic growth from flatlining or declining. He described the global data centre expansion as the largest economic lift since railroad construction in the 1880s and 1890s.

Data centre construction now accounts for 2.4 per cent of global GDP, above the 1950s highway construction surge and the 1930s electrification period.

Concerns over long-term returns Reserve Bank governor Michele Bullock said the AI-related investment surge reversed an earlier slowdown in activity during the second half of 2025. Westpac chief economist Luci Ellis noted the boom resembles the earlier mining investment wave and could prove disruptive because it draws resources while remaining largely unaffected by interest rate changes.

Independent economist Saul Eslake said the heavy reliance on imported computer equipment means the spending may subtract from overall growth. He questioned whether data centre operators will generate company tax revenue comparable to the amounts produced during the mining boom.

Banking regulator head John Lonsdale told a Senate committee that private credit financing of many centres creates new vulnerabilities, though Australian exposures remain contained. Charlton said state and federal governments are requiring data centres to secure grid-scale renewable energy to maintain community support.