National Economy

National economy

Trends: National economic growth is solid at an annual growth rate of +3.6% for the year to December 2025. On a per capita basis, this equates to an increase of 0.9%.

Latest: In the last quarter of 2025, Australia’s GDP grew by 0.8%, with household saving ratios increasing to 6.9%. In nominal terms (current price), the economy grew by 1.8% in the December quarter, reflecting continued elevated price increases (+1.4% in the quarter).

Data source: Data source: ABS Australian National Accounts: National Income, Expenditure and Product.

At the national level, Australian Bureau of Statistics (ABS) data shows a quarterly rise in Gross Domestic Product (GDP) of 0.8% for the last quarter of 2025, slightly up on the previous quarter’s rise of 0.5% and giving a 12 month rise of 2.6% (chain volume measures). GDP per capita rose by 0.9%. The ABS Australian National Accounts highlight the following points:

  • Household Consumption: Household consumption continued to grow (+0.3%), mainly due to increased expenditure on discretionary services. Household saving to income ratio rose to 6.9%, a significant increase over the last 12 months.
  • Government Expenditure: Government consumption grew 0.9%, with increased expenditure by local and state government on both employee and non-employee expenses (mostly health, education and policing). Expenditure on defence (+2.1%) and social benefit programs (Medicare and NDIS) continued to rise.
  • Public investment grew 0.9% and private investment grew 0.7%. Construction and the establishment of data centres were the main positive drivers, whilst machinery and equipment investment declined by 2.0%.
  • Net Trade: Net trade detracted 0.1 percentage points from GDP growth, with a rise in exports (+1.4%) being offset by a rise in imports (+1.8%). Exports of both goods (+1.4%) and services (+1.1%) grew, whilst imports of goods (+2.7%) grew and imports of services fell (-0.4%)
  • Coal, LNG and iron ore increased production with gross value added of mining increasing 2.6%, followed by growth in gross value added in agriculture of +2.5%. Price increases of mining commodities further contributed to growth in profits from the sector.

See ABS for more info.

Data source: Data source: ABS Australian National Accounts: National Income, Expenditure and Product.

Business performance

The NAB Group Economics report data which suggest that business activity in NSW - and by extension regions like the Hunter - remained broadly resilient into late 2025, with business conditions consistently positive and generally tracking around or slightly above national levels. Monthly survey results show a rebound in conditions in December (around +9 nationally and similar in NSW), alongside modestly positive confidence, indicating that economic momentum held up toward year-end despite earlier softening . This aligns with the quarterly SME survey, where conditions remained just positive but confidence stayed below average, pointing to continued activity but cautious sentiment.

The early-2026 data introduce some short-term volatility—particularly a dip in NSW conditions in January followed by a rebound in February—but this is likely within the normal range of monthly survey variation rather than evidence of a structural shift. Importantly, the latest observations only extend to February 2026 and therefore precede recent geopolitical developments in the Middle East, which may affect energy prices, supply chains, and business sentiment going forward. As such, these results should be interpreted as a pre-shock baseline, indicating a steady but cautious operating environment, rather than a reliable guide to near-term conditions.

Across key sectors relevant to the Hunter, NAB survey evidence points to uneven but resilient conditions. Mining (including coal) remains the main area of caution: confidence has lagged other industries despite generally stable operating conditions, implying ongoing production but restrained investment and hiring. In contrast, manufacturing and coal‑adjacent supply chains have shown clearer improvement since late 2025, supporting utilisation of existing capacity, while transport, logistics and utilities have benefited from steady bulk export and infrastructure demand, albeit with capacity running tight. Construction and business services continue to operate with elevated capacity utilisation and labour constraints, limiting rapid expansion but underpinning regional activity through professional, engineering and project services. Overall, the sector mix suggests the Hunter is being supported by diversification and services momentum, while coal and mining provide stability rather than growth, leaving the regional outlook steady but sensitive to global and policy‑driven volatility.

Data source: NAB Group Economics

Household spending

The ABS Monthly Household Spending Indicator for January 2026 shows an increase in household spending of +4.6% compared to January 2025 (in current prices). In NSW, total household spending increased by +4.4%. This was led by spending on services (+5.2%), with a lower increase on goods (+3.6%). Spending on food in NSW increased +4.8%, while expenditure on alcohol and tobacco decreased 11.2%. Discretionary expenditure (+4.6% overall) was driven by spending on recreation and culture (+6.4%) and miscellaneous goods and services (+8.7%).

The consumer price index rose to 3.8% in the 12 months to January 2026 following previous declines. The annualised CPI is stable over the last 3 months of data (Nov-Jan), but slightly up from earlier in 2025. Housing remains the principal driver (+6.8%) followed by food and non-alcoholic beverages (+3.1%) and recreation and culture (+3.7%). Transport (-0.9% monthly, +1.1% annually) was the only consumption area that saw a monthly decline in prices.

Data source: ABS Monthly consumer price index indicator

The ABS publishes specific price data on housing related expenses to give better insights (at the national level) into the price movements of purchases, rents and other expenses. Rents are still rising (up +3.9% in the previous 12 months). In comparison new dwelling prices have risen 3.5%. Electricity prices have risen due to the cessation of various state and federal rebates.

Data source: ABS Monthly consumer price index indicator

An ongoing challenge for housing is the cost of adding new supply. While the extreme construction cost escalation seen in 2021 and 2022 has eased, the ABS still reported further price growth in December quarter 2025. Nationally, residential building construction prices rose 1.3% in the quarter and were one of the main contributors to growth in final demand, with the ABS noting that demand for house construction continued to gradually build. This suggests cost pressures for delivering new housing remain present even though quarterly increases have become more moderate than earlier in the cycle.

Data source: ABS Producer Price Indexes, Australia