FEAR & GREED | Business News Why we're wrong about our productivity problem
Jan 7, 2026
Luci Ellis, Chief Economist at Westpac, dives into the intriguing world of business investment and productivity. She discusses how crucial investment in machines, software, and infrastructure boosts productivity. Confidence and demand are highlighted as key drivers for firms' investment decisions. Luci also explores the current investment landscape, noting shifts in the non-mining sector and the balancing act between AI and other tech investments. Her insights on data centres reveal their efficiency benefits without detracting from overall investment opportunities.
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Investment Drives Future Productivity
- Business investment supplies workers with better machines, software and buildings that raise output per hour.
- Luci Ellis frames investment as the main driver of future productivity, not just current output.
Base Capex On Demand And Tech Opportunities
- Assess future demand and industry prospects before committing to new capital spending.
- Consider technology opportunities like AI and data centres when planning investment to capture efficiency gains.
Data Centres Boost Efficiency, Not Just AI
- Data centres and cloud migration are investment areas that deliver efficiency as well as capacity for AI.
- Moving servers to the cloud can be more efficient than maintaining on-site infrastructure.