National Economy

National economy

Trends: National economic growth accelerated modestly in the latest quarter, though the through-the-year rate has continued to ease, at +2.1% to the June quarter 2026.

Latest: In the June quarter 2026, Australia’s GDP grew by +0.4%, picking up from a softer +0.3% in the March quarter 2026. With population still growing, the gain in aggregate output did not translate into higher output per person. Annual growth was +2.1% (chain volume measures), down from 2.5% in the year to the March quarter.

Download the data behind this chart (CSV) 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 +0.4% for the June quarter 2026. This is a step up from the previous quarter’s rise of +0.3% and leaves the 12-month rate of growth at +2.1% (chain volume measures). The composition of growth differed from the previous quarter: net trade moved from a large detraction to a small positive contribution, private investment was flat after driving the March quarter, and household and government consumption accounted for most of the increase. On a per-capita basis, GDP was flat in the quarter (up 0.7% over the year).

Key themes from the ABS Australian National Accounts, June quarter 2026 release:

  • Household consumption rose 0.4% in the quarter (1.8% through the year) and added 0.2 percentage points to growth. The household saving ratio edged up to 6.5%, from 6.4% in the previous quarter.
  • Government final consumption rose 0.6% (2.0% through the year), adding 0.1 percentage points to growth.
  • Private investment was flat in the quarter and made no contribution to growth. Machinery and equipment fell 6.6%, unwinding the 17.3% rise of the March quarter, while dwelling investment rose 1.6%.
  • Net trade added 0.1 percentage points to growth, with exports up 0.8% and imports up 0.5%.
  • Mining gross value added rose 1.3%, following a 2.0% fall in the March quarter. The ABS attributes the recovery in coal to a bounce back from earlier weather disruptions.
  • The terms of trade fell 1.6% in the quarter and were 0.6% lower through the year.

See ABS for more info.

Download the data behind this chart (CSV) Data source: ABS Australian National Accounts: National Income, Expenditure and Product.

Business performance

The NAB Monthly Business Survey gives a read on business activity in NSW, and by extension regions like the Hunter. All figures quoted here are seasonally adjusted. To August 2026, the survey put business conditions in NSW at around 0 (compared with around -1 nationally), while business confidence was around -9 in NSW and around -8 nationally. The conditions index combines reported trading, profitability and employment, while confidence is more forward-looking and tends to move faster with global developments.

The pattern reported in the June update, of weak confidence alongside positive trading conditions, no longer holds. Conditions in NSW have trended down from around +11 in late 2025 to approximately zero, and the national reading has turned negative for the first time in six years, its lowest since August 2020. Confidence fell to around -31 in NSW in March 2026 following the outbreak of the Middle East conflict and recovered to near neutral by June, before falling sharply in July and edging up in August to remain weak at -9. NAB notes national confidence remains about 7 points below its pre-conflict February level and 13 points below its long-run average.

At an industry level, conditions fell in six of the eight industries surveyed, led by construction, mining and manufacturing. Confidence was steady or improved in most industries but fell across retail, construction and mining. In trend terms confidence is now negative in every industry, with transport and utilities among the weakest. Capacity utilisation eased to 82.5%, still above its long-run average.

Within the conditions index, profitability fell 10 points to -9 while employment held at +3. NAB notes this divergence is unlikely to be sustained, and that weaker employment outcomes would be expected to follow if profitability stays at these levels. NAB also identifies construction as an area to watch, given dwelling prices, construction costs and developer solvency.

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Data source: NAB Group Economics

Household spending and prices

The ABS Monthly Household Spending Indicator shows household spending continuing to grow, up around +7.0% in current prices over the year to July 2026. In NSW, spending was 6.4% higher over the same year, led by recreation and culture (+9.8%) and transport (+8.2%). Discretionary spending rose 6.9% against 5.5% for non-discretionary, and services 6.6% against 6.3% for goods. Food spending rose 6.2%, while alcohol and tobacco was the weakest category at +2.0%.

The consumer price index rose +3.5% over the year to July 2026. Inflation has turned since the previous update: the monthly indicator jumped from 3.7% in February to a peak of 4.6% in March 2026, then eased in each of the four months since (4.2%, 4.0%, 3.8% and +3.5% in July). It nonetheless remains above the Reserve Bank’s 2 to 3 per cent target band.

The spike and the subsequent easing are both largely a tradables story. Tradables inflation rose from 1.3% in February to 4.5% in March and was back to 1.7% by July, following automotive fuel, where the year-ended rate moved from -7.2% in February to +24.2% in March on the disruption to oil markets, and to -0.4% by July. Non-tradables inflation has changed little over the same period, at 5.0% in February, 4.6% in March and 4.4% in July, so domestic price pressure remains above the target band.

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Data source: ABS Consumer Price Index, Australia (monthly)

The ABS publishes specific price data on housing-related expenses to give better insight (at the national level) into the price movements of purchases, rents and other expenses. Over the year to July 2026, electricity rose 6.1% as state and federal rebates continued to unwind, new dwelling purchase 5.7%, gas and other household fuels 3.7%, and rents 3.6%.

Download the data behind this chart (CSV) Data source: ABS Consumer Price Index, Australia (monthly)

An ongoing challenge for housing is the cost of adding new supply. Input prices to house construction in Sydney, the series shown below, rose around +2.3% in the June quarter 2026 to be up about +3.5% over the year. The quarterly increase is larger than the four preceding quarters combined, so the moderation reported in the June update has not continued. The August NAB survey points the same way, reporting purchase-cost growth about a percentage point above its pre-conflict pace nationally and the largest industry increase in construction, up 1.2 percentage points in the month. A single quarterly print can be revised.

Download the data behind this chart (CSV) Data source: ABS Producer Price Indexes, Australia