Reserve Bank: AI Could Supercharge Your Workplace but Lift Rates
Reserve Bank of Australia chief economist Sarah Hunter said on Monday the AI investment boom could keep interest rates higher. She found little sign yet of job losses, though hiring of younger workers in AI-exposed jobs looks weaker. The bank released four new research papers.
Reserve Bank of Australia chief economist Sarah Hunter warned on Monday, November 9, 2026, that the AI building boom could force interest rates to stay higher, even as the technology could supercharge your workplace over time.
Hunter spoke at a business conference in Sydney. She said there are few signs so far that AI will eat into the job prospects of young Australians.
A boom that surprised central banks
Investment in data centres is up 10-fold over the past three years, Hunter said. There are signs they are competing with the construction sector for trade workers.
Data centre construction alone could be equivalent to 2 per cent of GDP for the next two years. Their demand on the energy grid could also push up power prices.
The scale has caught the Reserve Bank and other central banks by surprise. Last week the bank forecast business investment would climb 12 per cent this year. In May it had forecast growth of just 0.8 per cent.
Why rates could stay higher
Hunter likened the boom to the rollout of the internet in the late 1990s and early 2000s. That was a period of robust growth and higher interest rates around the world.
She said there is early evidence of the same effect now. "Our estimates for the neutral rate have risen in recent years, and bond yields have increased over the past couple of months," she said, with market participants citing strong demand for capital.
"Firms want to invest to take advantage of the new technology and to expand their capacity to meet faster future growth," Hunter said. Because this is happening globally, she added, firms "will be competing for scarce savings, pushing up interest rates."
Productivity and jobs
The federal government is under pressure to lift Australia's productivity, which like that of most nations has flatlined for the past decade. Hunter said there is limited evidence yet of an AI-led gain, likely because businesses need time to invest and reorganize.
She pointed to what economists call a productivity J-curve. Electricity is one example: the biggest gains came not from swapping steam engines for electric motors but from redesigning factory processes.
On jobs, Hunter said there is little evidence AI has affected overall employment. She did note signs of lower hiring among younger workers in "highly AI-exposed occupations."
Contacts in the bank's liaison program say AI has not yet changed most firms' headcount and is not expected to over the next year, she said.
New research on household exposure
The bank released four new research pieces on AI on Monday. One paper suggests 5.3 per cent of Australian households' financial wealth, estimated at almost $9 trillion, is invested in AI-related companies, directly or through superannuation. In late 2022 the figure was 2 per cent.
Separate research shows the bank expects $115 billion to be invested across Australia in data centres by 2028, or about 2 per cent of GDP per year. That excludes supporting infrastructure such as energy supply.
