Australian Businesses Are Investing at the Highest Rate in Three Years

Business investment in Australia has hit its highest level in three years, even as confidence surveys tell a more cautious story. The gap between sentiment and action is widening, and it matters for anyone running or financing a business.

NAB's latest monthly business survey found that its capital expenditure measure jumped three points in February 2026 to the highest reading since early 2023. Forward orders also improved, suggesting demand is holding up. Meanwhile, the ABS capital expenditure survey shows businesses expect to spend $158.4 billion on new investment in 2026–27, 7.3% higher than the same estimate a year earlier.

The confidence gap

Here's the interesting part: while actual investment is climbing, headline business confidence fell to -1 in February and -4 in the March quarter, its lowest point since late 2024. Businesses are cautious about the macro outlook, citing wage costs, energy prices, and rate uncertainty as key concerns.

But they're investing anyway. That's not a contradiction: it's a sign that businesses are making calculated bets on growth rather than waiting for perfect conditions.

Where the money is going

The strongest investment growth is in equipment and machinery, particularly in technology, data infrastructure, and digital tools. The ABS data shows information and telecommunications capex surged 91.5% off the back of data centre buildouts.

For small and medium businesses, the picture is also encouraging. MYOB's latest Business Monitor, surveying more than 1,000 SMEs, found that 19% reported revenue increases, up from 16% six months earlier. A quarter of SMEs expect revenue to climb further over the next 12 months.

Start-ups are leading the charge. More than a third of newer businesses reported higher revenue, nearly triple the rate of established businesses. And among owners aged 18 to 30, 37% expect economic conditions to improve, compared with 24% across all business owners surveyed.

What's driving it

A few things are coming together. First, forward orders are up, which means demand is still flowing through the economy despite cost pressures. Second, competition among lenders, particularly non-bank lenders, is keeping finance accessible even as rates sit higher than a year ago.

The pattern matches what brokers are seeing on the ground: businesses aren't waiting for rates to drop before upgrading equipment or vehicles. They're weighing the cost of finance against the cost of doing nothing, and increasingly deciding that standing still is the bigger risk.

What business owners should consider

If you've been holding off on an equipment purchase, vehicle upgrade, or technology investment, the data suggests you're not alone in reconsidering. Investment expectations are up and lenders are competing for business.

A few practical steps worth considering:

• Review what you've been putting off. Equipment, a vehicle, or technology that would genuinely improve day-to-day operations is worth re-costing while investment across the economy is rising.
• Check your finance options. Rates vary significantly across lenders, and a quote from six months ago may not reflect what's available today.
• Factor in the full cost of waiting. Lost productivity, missed revenue, or higher equipment prices later in the year can outweigh the interest cost of financing now.

This article is general information only and is not financial advice.