03/09/2026
Out now | Productivity update from Deputy Chair Alex Robson:
Australia’s productivity growth remained stagnant in the June 2026 quarter, following a 0.6% decline in the March quarter. Output and hours worked both increased by 0.4% in the quarter, leaving labour productivity flat. Over the year to June, output rose 2.1%, while hours worked increased 2.3%, resulting in a 0.2% decline in labour productivity.
Market-sector labour productivity rebounded modestly, increasing by 0.2% in the June quarter after falling 0.7% in March, but is still 0.1% lower than this time last year.
Non market-sector productivity declined by 0.1%, following a 0.3% fall in the previous quarter, to be 0.3% lower than this time last year. Non-market sector productivity is now below the level it was in March 2007.
Overall, we are barely 1% above our 2015–19 average level of productivity. While this quarter’s flat overall result is an improvement on the decline in the March quarter, the stagnant pattern across the economy remains a cause for concern.
Productivity is the main driver of our long-term prosperity. It is the clearest path to sustainably improving Australians’ real wages and broader living standards.
These results underscore the importance of ongoing reform. No single policy can bring productivity growth to its long-term average – governments will have to make a lot of pro-productivity decisions.
In the May Budget, the government announced that it was progressing 13 of the 17 reform areas we highlighted in our five pillars of productivity inquiries. An important priority we highlighted in those inquiries was a need to reduce the cost of regulation. The PC is currently progressing inquiries into housing supply, business dynamism and reporting requirements that will identify further areas where government can streamline and improve regulation and regulatory processes to boost productivity.
