Private capital expenditure on machinery and equipment

IBISWorld forecasts private capital expenditure on machinery and equipment to increase by 6.1% in 2025-26 to $117.2 billion. This is primarily driven by rising expenditure from sectors like Mining and Information, Media and Telecommunication (IMT). Commodity prices, including gold, lithium and copper, have rallied in late 2025, encouraging miners to ramp up production and expand operations, driving up machinery and equipment spending. Existing iron ore miners are also ramping up production and heavily investing in machinery amid rising input costs and volatile commodity prices. These trends have contributed to the Mining sector's machinery capital expenditure (seasonally adjusted) rising from $13.7 billion in 2024 to $15.0 billion in 2025. The expansion of Australia's AI and data centre infrastructure has also bolstered the IMT sector's spending on machinery and equipment, with sector participants splurging $7.2 billion in 2025, a 59.5% jump from 2024.

Capital expenditure on machinery and equipment trended upwards over the past five years, but activity across sectors was volatile. The transport sector's capital expenditure declined significantly in 2020-21, as lockdown restrictions weighed on public transport use. This discouraged considerable investment across the transport sector and restricted capital expenditure until lockdowns ended in 2022-23. The professional services sector reported a sharp rise in capital expenditure on machinery and equipment in 2020-21. Many firms within the sector have been quick to adopt modern technology, particularly driven by shifts to remote working. Smaller enterprises that were initially resistant to new technology also invested heavily in new equipment in line with the transition to remote work. Elevated interest rates over the three years through 2024-25 have slowed growth in private capital expenditure on machinery and equipment. The construction sector's spending on machinery and equipment has also crept upwards over the past five years and peaked in 2024-25 according to the latest ABS data. State governments like Victoria and New South Wales have spent heavily on new infrastructure programs and encouraged greater capital investment as construction firms look to compete for contracts or complete current projects. Examples of these projects include the Victoria suburban rail loop, the expansion of the Sydney metro network, and the ongoing development of Western Sydney airport. Still, this was offset by a muted private residential pipeline as tight financing and challenging conditions led to a wave of builder insolvencies and discouraged existing builders from investing heavily in machinery and equipment. Overall, IBISWorld forecasts private capital expenditure on machinery and equipment to rise at a compound annual rate of 3.6% over the five years through 2025-26.