Productivity flatlined over March quarter
Make us a preferred source
Make us a preferred source on Google
The news: Labour productivity gains have continued to elude the Australian economy, remaining flat in the March quarter and declining 0.9% over the year.
The numbers: The Productivity Commission's latest quarterly bulletin for June 2025 found a 0.2% increase in output over the three months to March 2025 but a 0.3% rise in hours worked resulting in a stagnant overall productivity result.
In annual terms, output increased 1.3% but hours worked jumped 2.4%.
The context: The Albanese government has made productivity growth its focus for the second term of government, though Treasurer Jim Chalmers has warned there is no short-term fix to the problem.
The Productivity Commission is currently working through submissions to an inquiry focused on five pillars of the economy that is expected to form part of the discussions at a roundtable in Canberra led by Chalmers in August. This includes a focus on economic dynamism, corporate tax and skills.
What they said: "It’s important to remember what we stand to gain by getting productivity moving again," Productivity Commission deputy chair Alex Robson said.
"Productivity improves when we can work the same number of hours but produce more, which ultimately means we receive more income for each hour of work. This gives us more choice about what we do with our time – we can work more hours to increase our incomes further, take more time off or a mix of both," he said.
The source: Productivity Commission bulletin
