Q+A: The Week Ahead | 7 Sep 2026

Welcome to Fear and Greed Q&A, where we ask and answer questions about business, investing, economics, politics, and more. I'm Michael Thompson, and every Monday morning, we are joined by economist Stephen Koukoulis. To take a look at the week ahead, you will find him as always at thekouk.com, T-H-E-K-O-U-K.com, and sharing his views regularly on LinkedIn as well. Stephen, good morning. Very good morning, Michael. Now, Stephen, we had a massive week last week, but a slightly quieter one ahead of us. So in the wake of everything that we've seen lately, the GDP figures from last week, the productivity numbers that were within all of that, the inflation and household spending data from the week before, What I want to do today is take a look at all of this from a business lens because there is a bit of a tendency, and I'm as guilty as the next person, that as soon as you get the data that we had, say, last week, you just jump straight to what does it mean for interest rates. And it does tend to become a little bit gloomy. But today, we are going to go through and pick out five things that businesses can be positive about. So five reasons why Australian businesses shouldn't be too gloomy right now. Kick us off with number one.

Look, I think the thing that's come through in the data, not just last week in the national accounts, but just sort of the momentum of the last, well, six to 12 months, there's been capital expenditure increasing. Now, why does that matter? Well, it matters probably most importantly because it does allow for firms to be more productive. They're not investing in data centers or warehouses or machinery plant and equipment for fun. They're doing it to make their business more profitable. to expand their operations. And with that, the economy expands. So the fact that CapEx was up 10.5% in the year to June this year, and expectations for next financial year, so 26, 27 financial year, are for another 15% growth in capital expenditure. That's the sort of fundamental driver of productivity, of output. And by the way, while these things are being built and used, they're adding to GDP, which is

no bad thing. Does it matter that so much of the capex spend is on data centres or is it just the case that any increase in capital expenditure increases is a good thing.

Look, I'm of the view that any increase in capex is a good thing. You know, we go back to the mining boom. What was that in the 2005 to 2010 period approximately? mining investment when absolutely as they say a gangbusters it was an incredible period and people said oh it's too narrowly focused oh isn't it bad but now here we are you know a decade and more after that capex was undertaken and it's moved from what was just the machinery the conveyor belts the big diggers and the lng platforms off the north north world shelf among other things too and it's just churning out the output That's the basis of why firms undertook that CapEx and it's yielding benefits for the Australian economy right now. So the fact that it's data centres, yeah, you can sort of make a little bit of a point that it's relatively narrowly based. But once these data centres come online, once the firms that