Dave Richardson
Research Economist

Productivity has been the feature item on some of the big economics events taking place recently and today’s national accounts give us the latest update on productivity for the June quarter 2025.

The figures show a quarterly increase of 0.3% in total output per hour of work (Labour productivity) and an increase of 0.5% in the market sector alone.  For the year to June 2025 the figures were lower at 0.1% for total output per hour worked and 0.3% in the market sector.

The higher figures for the June quarter relative to the year to June are due to the productivity slump we have passed through. We can see this in the chart below. After falling in mid-2024, productivity has been slowly growing.

Productivity: Indexes of output per hour worked.

Source: ABS Australian National Accounts: National Income, Expenditure and Product

The total productivity figure is interesting but it’s the market sector productivity figure that tells us whether or not there is more stuff that you can buy relative to the incomes being received. Fortunately, the market sector figures tend to be marginally higher.

There is a glimmer of hope that the household sector is recovering and will spend more following the reductions in interest rates by the Reserve Bank and in anticipation of future interest rate reductions.