Australians are working more hours but productivity is falling, report says

The news: Australians are "running to stand still", the Productivity Commission says, after productivity slid 2% despite record growth in hours worked.

The numbers: Output increased 0.4% in the June quarter despite hours worked jumping by 2.4% in the whole economy and the 2.2% in the market sector, the largest increase recorded outside of the COVID-19 period. The result was a 2% drop in productivity economy-wide, with 15 of 19 industries recording productivity declines over the quarter. Arts and recreation posted the biggest productivity decline at -7.6%, but three industries were responsible for 46% of the total decline: mining; utilities; and information, media and telecommunications.

The context: Productivity growth is said to be the biggest driver of real wage growth. The commission noted this quarter's productivity issues in mining, which accounted for about a third of Australia's productivity decline, was driven by poor weather and planned maintenance that reduced production.

What they said: "Australians worked more hours just to produce and buy the same amount of goods and services. In other words, Australians have been running to stand still," Productivity Commission acting chair Alex Robson said in a statement.