Economic Dashboard

Australia

Real-time market intelligence, economic indicators and sector analysis

Updated 19 Feb 2026 2,788 Indicators

Market Overview

February 2026 Economic Summary

Australia at a Crossroads as Stubborn Inflation Forces RBA's Hand

The RBA’s decision to resume its tightening cycle, hiking the cash rate to 3.85%, has cast the economic outlook in a new light. This move, breaking a five-month pause, comes as December inflation re-accelerated to 3.8%, reversing its downward trend. While the economy shows surface-level resilience, underlying pressures are building as the labour market cools and households feel the pinch of rising essential costs, creating a complex and uncertain path forward for 2026.

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Market Snapshot As at 19 Feb 2026
3.85% RBA Cash Rate
9,334 All Ordinaries
9,106 S&P/ASX 200
4.75% 10yr Bond
USA
0.7072 AUD/USD
China
4.8832 AUD/CNY
UK
0.5234 AUD/GBP

Key Economic Indicators

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Indicator As At Units Latest -1yr -2yr -3yr -4yr -5yr
GDP 2025-Sep $m 687,757 (+2.1%) 673,927 (+0.8%) 668,453 (+2.1%) 654,444 (+6.1%) 616,735 (+4.7%) 589,183
CPI 2025-Dec Index 100.97 (+3.8%) 97.31 (+2.7%) 94.78 (+4.1%) 91.09 (+7.8%) 84.47 (+3.5%) 81.62
Population 2025-Jun Persons 27,614,411 (+1.5%) 27,194,286 (+2.0%) 26,659,922 (+2.5%) 26,018,721 (+1.3%) 25,685,412 (+0.1%) 25,649,248
Employment 2025-Nov Persons ('000) 14,656 (+1.3%) 14,473 (+1.9%) 14,207 (+3.0%) 13,787 (+4.9%) 13,148 (+3.2%) 12,745
Unemployment 2025-Nov % 4.32 (+38bps) 3.94 (+1bps) 3.93 (+41bps) 3.52 (-111bps) 4.63 (-218bps) 6.81
Job Ads 2025-Nov No 616,461 (-8.5%) 673,554 (-14.7%) 789,663 (-6.8%) 847,229 (+13.2%) 748,715 (+54.4%) 485,019
Household Spending 2025-Sep $m 232,015 (+5.1%) 220,838 (+2.8%) 214,921 (+6.6%) 201,614 (+28.4%) 156,982 (-0.4%) 157,628
House Prices 2025-Sep $000s 1,042 (+6.1%) 982 (+5.6%) 930 (+6.3%) 875 (+2.1%) 857 (+24.4%) 689
Attached Prices 2025-Sep $000s 710.00 (+5.0%) 676.00 (+5.0%) 644.00 (+6.1%) 607.00 (-2.9%) 625.00 (+7.6%) 581.00
Dwelling Approvals 2025-Oct No 191,311 (+11.6%) 171,361 (+1.8%) 168,347 (-12.8%) 193,019 (-16.4%) 230,989 (+27.1%) 181,769
Superannuation 2025-Sep $bn 4,466 (+9.4%) 4,082 (+13.4%) 3,599 (+9.7%) 3,281 (-4.4%) 3,434 (+18.5%) 2,897
ASX All Ords 2026-Jan Index 9,164 (+4.3%) 8,790 (+11.1%) 7,913 (+3.0%) 7,686 (+5.8%) 7,268 (+5.8%) 6,871

Infrastructure & Major Projects

Transforming Australia's future

Sample 16 Active

AI Generated Denotes AI-based impression for illustrative purposes only, not to be taken as definitive under any circumstances. Developers and project owners wishing us to use original imagery please Contact Us and we will do so.

NSW

Sydney Metro West - Western Sydney Airport to Macarthur Corridor (South West Rail Link Extension)

The project involves the preservation of a 20km corridor for a future north-south extension of the Sydney Metro network. It will connect the future Bradfield station (part of the S

$5.1B 2047 Proposed
QLD

Greater Springfield Master Planned Community

Australia's largest privately funded master-planned city, covering 2,860 hectares in the Western Growth Corridor. As of 2026, the project has exceeded $30 billion in investment wit

$88.0B 2045 Construction
QLD

Brisbane Metro Northern Extension (Northern Metro)

Expansion of the Brisbane Metro rapid transit system from the CBD to Carseldine. The project will deliver high-capacity, fully electric metro vehicles operating on a high-frequency

$2.5B 2032 Planning
NSW

Sydney Metro Eastern Suburbs Extension

A strategic long-term extension of the Sydney Metro network, specifically envisioned as a continuation of Metro West from Hunter Street. The corridor is identified in the South Eas

$15.0B 2041 Proposed
WA

Aboriginal Cultural Centre

A landmark cultural infrastructure project on Whadjuk Noongar Country, situated between the Perth Concert Hall and the Derbarl Yerrigan (Swan River). The centre is designed as an i

$104M 2028 Planning
SA

Riverlea Estate (Buckland Park Township)

South Australia's largest master-planned community, covering 1,340ha and planned to deliver 12,000 homes for over 40,000 residents. Key features include the $100M Palms Shopping Vi

$3.0B 2046 Construction
VIC

Kew Library Upgrade

City of Boroondara is undertaking an extensive upgrade of the Kew Library building starting in April 2026. Following a decision to preserve the existing modernist structure rather

$7M 2027 Approved
VIC

Sunshine Priority Precinct Vision 2050

The Sunshine Priority Precinct Vision 2050 is a major urban renewal strategy to establish Sunshine as the capital of Melbournes west. It leverages over $20 billion in total infrast

$14.0B 2050 Planning
SA

Whyalla GREENSTEEL Transformation

A nationally significant industrial program to transition the Whyalla Steelworks into a world-leading low-carbon facility. The project focuses on substituting coal-based blast furn

$2.4B 2030 Under Assessment
WA

Fortescue Port Hedland Operations Decarbonisation and Modernisation

Comprehensive modernisation of Fortescue's Port Hedland facilities to achieve 'Real Zero' terrestrial emissions by 2030. Key work includes upgrading the Herb Elliott Port to a 210M

$200M 2030 Construction
NT

Middle Arm Sustainable Development Precinct

A 1,500-hectare sustainable industrial hub in Darwin Harbour focused on low-carbon industries including renewable hydrogen, carbon capture and storage (CCS), critical minerals proc

$15.0B 2035 Planning
ACT

Molonglo Town Centre

Molonglo Town Centre is the future sixth town centre for Canberra, serving as the primary commercial, civic, and community hub for the Molonglo Valley. The 97-hectare precinct will

$850M 2045 Planning
QLD

Waraba Priority Development Area

Waraba is a significant greenfield city development spanning 2,900 hectares in the Moreton Bay Region. Declared a Priority Development Area in August 2024, the project will deliver

$12.0B 2065 Construction
QLD

Woree Social and Affordable Housing Precinct

Queensland's largest social and affordable housing precinct, delivering 490 modern, energy-efficient apartments specifically for seniors over 55 and people living with disability.

$395M 2026 Construction
NSW

Central-West Orana Renewable Energy Zone (REZ) Transmission Project

Australia's first coordinated Renewable Energy Zone transmission project. It involves the delivery of 90km of 500kV and 150km of 330kV transmission lines, along with energy hubs at

$7.0B 2029 Construction
QLD

Queensland Energy Roadmap 2025

The Queensland Energy Roadmap 2025 is a strategic framework focused on delivering affordable, reliable, and sustainable energy through 2035. Key initiatives include a $1.6 billion

$60.0B 2035 Approved

GDP & Economic Output

Economic growth moderates while per-capita prosperity stalls amid sector divergence.
Australia's annual GDP reached $2.73t as of September 2025, with year-on-year growth at 2.1%. This expansion, while positive, is below the long-term trend and per-capita growth was a marginal 0.5%, indicating that strong population growth is diluting individual gains. Logistics and Agriculture were standout performers, while the Professional Services sector contracted, highlighting an uneven economic landscape.

Australian GDP totalled $687.8bn in the September Quarter of 2025, reaching a combined $2.73t over the rolling year. The year-on-year growth rate of 2.1% is below the 10-year average of 2.6%, signalling a clear moderation in economic momentum. While the economy remains resilient, the pace of growth has decelerated from the stronger rates seen in previous periods, reflecting a broader cooling trend in response to tighter monetary policy and shifting market conditions.
On a per-person basis, the economic story is more subdued. GDP per capita was recorded at $24,905 for the quarter. While headline GDP grew 2.1%, per capita GDP expanded by a mere 0.5% over the year. This significant divergence reveals that the nation's economic output is being diluted by strong population growth. This rate is well below the 10-year per capita average growth of 1.4%, signaling a near-stagnation in improving individual prosperity.
The economy's recent performance has been uneven across sectors. Growth was driven by standout results in Logistics, where output surged 6.9% against a 10-year average of 2.6%, and Agriculture, which grew 7.5% versus its 4.1% trend. In contrast, the Professional Services sector acted as a major drag on the economy, contracting by 3.4%. This marks a sharp reversal from its typical 4.0% annual growth, pointing to challenging business conditions and shifting corporate demand.
Annual GDP Growth
+2.1%
Below 10-yr average of +2.6%
Falling
GDP per Capita Growth
+0.5%
Significantly below 10-yr avg of +1.4%
Falling
Logistics Sector Growth
+6.9%
Far exceeds 10-yr average of +2.6%
Rising
Professional Services Growth
-3.4%
Reversal from 10-yr average of +4.0%
Falling

Population & Migration

Population growth moderates as overseas migration slows from record highs.
Australia's population reached 27.6 million at June 2025, with annual growth of 1.5% moderating from recent peaks. The slowdown is driven by a sharp fall in overseas migration, which has declined nearly 29% over the year. Natural increase remains above its long-term average. Western Australia (+2.2%) recorded the fastest growth, while New South Wales (+1.2%) lagged the national rate.

Australia's population reached 27.6 million as at June 2025, an increase of approximately 414,000 persons (1.5%) over the year. This rate represents a clear moderation from the record-high growth experienced in the immediate post-pandemic period. The trajectory has slowed as migration patterns begin to normalise from the initial reopening surge, pointing towards a more sustainable, albeit slower, pace of expansion.
The annual growth was driven by a net overseas migration of 305,600 persons and a natural increase (births minus deaths) of 107,400. The key story is the sharp deceleration in migration, with the annual intake falling by 28.8%—a stark contrast to its 10-year average growth rate of +32.2%. In contrast, natural increase was a standout performer, with its 1.9% annual growth significantly above the 10-year average decline of -3.3%, indicating a resilient demographic base.
At a state level, population growth is being led by Western Australia (+2.2%), Victoria (+1.8%), and Queensland (+1.8%), all surpassing the national average. Growth was notably slower in New South Wales (+1.2%), South Australia (+1.1%), and Tasmania (+0.2%). This divergence highlights the varying economic and migratory pulls across the country, with some states capturing a much larger share of the nation's growth than others.
Overseas Migration (YoY Growth)
-28.8%
vs 10yr avg of +32.2%
Falling
Natural Increase (YoY Growth)
+1.9%
vs 10yr avg of -3.3%
Rising
WA Population Growth (YoY)
+2.2%
Fastest growing state
Rising
Total Population
27.6m
+1.5% over the year
Rising

Development Activity

Dwelling approvals are recovering, but completions lag amid rising costs.
Dwelling approvals reached 191.3k in the year to October 2025, an 11.6% annual rise that outpaces the 10-year average. The recovery is led by a surge in attached dwelling approvals (+28.9%). However, completions are down 2.0% annually, pointing to a significant bottleneck in converting projects to finished housing stock. Growth is strongest in NT (+43.6%) and SA (+22.6%), while completions lag nationally.

191,300 dwellings were approved in Australia in the year to October 2025. While this represents a strong 11.6% recovery from recent lows, activity remains subdued on a per capita basis. There were 7.0 approvals per 1,000 persons, which is below the 10-year average of 8.0, highlighting the challenge in meeting underlying housing demand. The recovery has been primarily driven by a sharp increase in approvals for attached dwellings, which have surged well above their long-term trend.
Examining the pipeline reveals a clear bottleneck at the final stage. While approvals (191.3k) and commencements (179.0k) are both growing strongly and are above their 10-year average growth rates, completions (173.2k) have fallen by 2.0% over the past year. This disconnect suggests that while developers are getting projects approved, escalating costs and labour shortages are hindering their ability to finish homes, trapping new supply in the construction phase and delaying delivery to the market.
State-level performance highlights the varied nature of the recovery. On a year-on-year growth basis, the Northern Territory (+43.6%) and South Australia (+22.6%) have seen the most significant rebound in dwelling approvals. In the non-residential sector, commercial development has slowed, with total approval values growing by just 3.8%, well below the 10-year average of 7.6%. This weakness was driven by a sharp 5.4% contraction in industrial projects, while office-related development remained a bright spot (+18.2%).
Development Approvals - Attached
+28.9% YoY
+31.9pp above the 10-year average
Rising
Devbuildvalueind
-5.4% YoY
-17.9pp below the 10-year average
Falling
Dwelling Completions (Annual)
173.2k
Fell 2.0% over the year
Falling
Approvals per 1,000
7.0
Below the 10-year average of 8.0
Stable

Housing Market

Regional prices surge while affordability pressures shift across markets.
Australian capital city median house prices reached $1.04m in Sep-25, up 6.1% annually. Growth has shown signs of accelerating into 2026, with regional markets notably outperforming, up 9.3%. Growth is strongest in NT (+19.9%) and weakest in VIC (+0.4%), highlighting a multi-speed market.

The median house price in Australian capital cities reached $1,040,000 in September 2025, reflecting a 6.1% increase over the year. While a direct comparison to the decade average growth is unavailable, momentum appears to be building, with market indicators pointing to an acceleration from late 2025. In comparison, regional house prices saw stronger growth, reaching $703,000, up 9.3% annually against a 10-year average of 6.5%.
Affordability remains a critical issue, though the dynamic is shifting. Capital city attached dwellings are priced at 6.55x annual household income. This is surprisingly 15% below the 10-year average of 7.71x, suggesting affordability for units has improved. At 6.55x, they are 'moderately unaffordable'. In contrast, regional affordability has deteriorated, with the price-to-income multiple of 6.01x now sitting 6% above its decade average.
Transaction volumes for attached dwellings in capital cities declined 3.9% over the year, running contrary to the 10-year average annual growth of 1.7%, which may indicate buyer hesitancy in this segment. Across the states, price growth shows significant divergence. The strongest annual growth for houses was recorded in the Northern Territory (+19.9%) and Queensland (+13.5%), while Victoria (+0.4%) and Tasmania (+0.5%) saw the slowest price rises.
House Price Growth (Regional)
+9.3%
vs 10-year average of +6.5%
Rising
Attached Price to Income Multiple (Capitals)
6.55x
15.0% below 10-year average (improved affordability)
Falling
Attached Sales Volume (Capitals)
-3.9%
vs 10-year average growth of +1.7%
Falling
House Price Growth (NT)
+19.9%
Fastest growing state/territory
Rising

Housing Finance

Investor lending surges, driving housing finance well above long-term averages.
Housing finance commitments totalled $124.8bn in September 2025, with annual growth of 6.8% running well ahead of the 10-year average of 2.2%. Growth is being driven by a 19.0% surge in investor lending, which is outperforming significantly. Lending growth is strongest in the Northern Territory (+37.0%) and weakest in Western Australia (-0.8%), showing considerable state divergence.

Housing finance commitments totalled $124.8bn in September 2025, up 6.8% compared to a year ago. This growth rate is significantly above the 10-year average of 2.2%, indicating robust demand for housing credit. Lending volumes have recovered strongly from a prior slowdown, with recent data confirming that momentum continued towards the end of the year. This suggests the market has largely absorbed the impact of earlier interest rate rises and is responding to renewed confidence.
The lending landscape is increasingly shaped by investors. Owner-occupier commitments stood at $84.7bn (67.9% of total), growing just 1.9% annually, a rate below its long-term trend. In contrast, investor lending surged 19.0% to $40.1bn (32.1% of total), a growth rate more than double its 10-year average of 9.4%. This rising investor share, now at 32.1%, signals a clear shift in market composition, likely driven by expectations of capital growth and tight rental markets.
Growth in housing finance is varied across the states. The Northern Territory (+37.0%), ACT (+14.7%), and Tasmania (+12.6%) recorded the fastest annual growth in total lending. In contrast, Western Australia (-0.8%) saw a decline, with Queensland and South Australia also lagging the national pace. This divergence reflects differing local housing price trends and economic conditions. The overall strength, particularly from investors, persists despite earlier macroprudential tightening, pointing to a resilient housing market.
Housing Finance (Investor)
+19.0% YoY
vs 10yr avg +9.4%
Rising
Housing Finance (Total)
+6.8% YoY
vs 10yr avg +2.2%
Rising
Investor Share of Lending
32.1%
Growth significantly outpacing owner-occupiers
Rising
Housing Finance (Owner Occ)
+1.9% YoY
Lags investor growth significantly
Stable

Monetary & Financial Conditions

RBA resumes tightening cycle with a 25bp hike to 3.85% amid inflation fears.
The RBA cash rate now stands at 3.85% as of February 2026, following a recent 25bp hike that broke a five-month pause. This brings the rate just below its 10-year average of 3.90%. Bond yields are significantly above their long-term averages, with the two-year yield at 3.67%, suggesting markets are pricing in a period of higher rates. Variable mortgage rates remain elevated, pressuring household budgets.

The RBA cash rate stands at 3.85% as at February 2026, following a 25 basis point hike. This is slightly below the 10-year average of 3.90%. The February rate rise was the first policy change after a five-month pause, signaling the central bank's renewed focus on combating persistent inflation. The current tightening cycle reflects the RBA's commitment to returning inflation to its target band.
The transmission of monetary policy is evident in borrower rates. As of November 2025, the standard variable mortgage rate was 6.05%, while the 3-year fixed rate was 5.56%. This represented a 2.45% spread over the cash rate at the time. With commercial banks quickly passing on the latest RBA hike, mortgage holders now face variable rates approximately 1.02% higher than the 10-year average, tightening household finances.
The bond market is signaling that rates may remain elevated. The 2-year bond yield sits at 3.67%, with the 10-year yield higher at 4.42%. This creates a positive yield curve spread of 75 basis points. A positive or 'normal' yield curve suggests that financial markets anticipate a period of economic growth and do not foresee immediate rate cuts, expecting policy to remain tight to manage inflation.
Two Year Bond Yield
3.67%
78.1% above 10yr avg of 2.06%
Rising
Ten Year Bond Yield
4.42%
62.2% above 10yr avg of 2.72%
Rising
Variable Mortgage Rate
6.05%
20.3% above 10yr avg of 5.03%
Rising
RBA Cash Rate
3.85%
Now just below 10yr avg of 3.90%
Rising

FX Rates & Commodities

AUD strengthens against the USD, but weakening commodity prices pose a headwind.
The AUD is trading at $0.7000 (26-Jan), up 12.5% annually and 6.6% above its 10-year average. The currency is supported by favourable interest rate expectations, particularly against the US dollar. However, a significant 16.0pp drop in mining commodity price growth below its long-term average presents a notable risk. The AUD shows standout strength against the Japanese Yen.

The Australian dollar is trading at US$0.7000 as at 26-Jan, with the trade-weighted index standing at 64.50. The AUD is 6.6% above its 10-year average of US$0.66, and the TWI is 5.3% above its 10-year average of 61.23. The currency has appreciated strongly, up 12.5% over the year, reflecting a firming trajectory in early 2026 driven by expectations of diverging central bank policies.
Against major trading partners, the AUD shows mixed performance relative to historical averages. It is notably strong against the Japanese Yen, trading at 107.81, which is 11.4% above its 10-year average. The currency is also trading well above its long-term average against the US Dollar. In contrast, it has weakened against the Euro, trading at 0.59. This strength against key partners like Japan and the US provides favourable terms for exports and investment.
Australia's commodity price index has seen a year-on-year decline of 4.1%, a stark reversal from the 10-year average annual growth of 9.4%. This has been driven by a sharp downturn in the mining commodity index, which fell 5.7% against a 10-year average growth of 10.3%. In contrast, the rural commodity index remains robust, with growth of 8.9%—well above its 4.4% average. This divergence points to a weakening in the terms of trade, which presents a headwind for the AUD's outlook despite its recent strength.
Commodity Price Index - Mining AUD (YoY Growth)
-5.7%
16.0pp below 10yr avg growth of +10.3%
Falling
AUD / JPY Exchange Rate
107.81
11.4% above 10yr avg of 96.76
Rising
Commodity Price Index - Rural AUD (YoY Growth)
+8.9%
4.5pp above 10yr avg growth of +4.4%
Rising
AUD/USD Exchange Rate
0.7000
6.6% above 10yr avg of 0.6600
Rising

Employment

Labour market cools as unemployment rises, though job growth continues.
Australia's unemployment rate stood at 4.3% in November 2025, now above its 10-year average. Employment grew 1.3% annually, a gain driven by part-time roles (+3.1%) rather than full-time (+0.5%). While NSW has the lowest unemployment rate (3.9%), South Australia leads the nation in annual job growth (+4.6%), highlighting a varied economic landscape as the market moderates.

The unemployment rate in Australia stands at 4.3% as at November 2025. This is above the 10-year average of 3.9%, signaling a shift in labour market dynamics. The unemployment rate has risen from the historic lows recorded over the past two years, a clear indication that the period of extreme tightness in the job market is moderating. The trajectory points towards a continued normalisation from a very low base.
There were 14.66 million persons employed, up 1.3% over the year. This growth was primarily driven by a 3.1% increase in part-time employment, while full-time employment saw a more subdued rise of 0.5%. The composition of job creation, with part-time roles significantly outpacing full-time positions, suggests a potential cooling in underlying labour demand and a shift in the quality of employment.
Across the nation, New South Wales recorded the lowest unemployment rate at 3.9%, whereas Victoria had the highest at 4.7%. In terms of job creation, South Australia was the standout performer, with employment expanding by a strong 4.6% over the year. This divergence shows that while some states benefit from tight labour conditions, others are leading the charge in employment growth.
Unemployment Rate
4.3%
Above 10-year average of 3.9%
Rising
Part-Time Employment Growth
+3.1% YoY
Significantly outpacing full-time growth of +0.5%
Rising
SA Employment Growth
+4.6% YoY
Strongest employment growth in the nation
Rising
Unemployed Persons Growth
+11.7% YoY
Well above the 10-year average of +0.4%
Rising

Job Advertisements

Job ads cool across Australia, moderating from highs but signalling a softer job market ahead.
Australian job advertisements totalled 616.5k in Nov-25, down 8.5% annually as the labour market cools from recent peaks. The slowdown is most pronounced in professional roles, which are tracking significantly below their long-term growth average. Hiring demand is most resilient in South Australia and WA, but is falling sharply in the ACT and Tasmania, pointing to an uneven, softening outlook for employment.

Job advertisements in Australia totalled 616,500 in November 2025. While ad volumes remain above the long-term average, they have fallen 8.5% compared to a year ago and are tracking down from recent historic peaks. As a key leading indicator for employment, this continued moderation signals that the labour market is poised to soften over the coming months as hiring intentions ease across the economy.
The slowdown in hiring is broad-based. Professional job ads stood at 177,000, with industrial and trades at 125,200. The most significant trend is the sharp deceleration in professional roles, where annual growth is now tracking 12.4 percentage points below its 10-year average. This highlights that the pullback in hiring is affecting both white-collar and blue-collar sectors as economic activity slows.
The labour market slowdown is uneven across the country. South Australia (-0.7% YoY) and Western Australia (-5.0% YoY) are demonstrating the most resilience, with job ad volumes holding up better than the national trend. Conversely, hiring activity has fallen sharply in the ACT (-25.1% YoY) and Tasmania (-13.2% YoY), suggesting their labour markets are cooling more rapidly and leading the national downturn.
Job Ads (Total)
616.5k
Down 8.5% over the year, cooling from recent peaks
Falling
Job Ads (Professional)
-8.2% YoY
Growth is 12.4pp below its 10-year average, the largest deviation
Falling
Job Ads (ACT)
-25.1% YoY
The sharpest decline in hiring demand among all states/territories
Falling
Job Ads (SA)
-0.7% YoY
The most resilient state labour market, with ad volumes nearly stable
Stable

Wages & Earnings

Wage growth remains solid, but high inflation erodes purchasing power.
Wages grew 3.4% over the year to September 2025, with full-time earnings reaching $107,385 annually. However, with inflation also at 3.4%, real wage growth was zero, meaning no gain in purchasing power for workers over the year. Wage growth has moderated slightly from its peak. Among the states, Western Australia recorded the fastest wage growth, while the ACT continues to have the highest average earnings.

Wages grew 3.4% over the year to September 2025, as measured by the Wage Price Index. This is above the 10-year average wage growth of 2.5%. While growth remains elevated compared to historical standards, the pace has moderated from the recent peak, indicating that the period of rapid wage acceleration may be stabilising. Official forecasts suggest wage pressures may ease further in the coming year, influenced by a cooling labour market and shifting economic conditions.
Average weekly full-time earnings reached $2,083 in May 2025, which annualises to $107,385 per year for full-time workers. While nominal wages grew 3.4%, with inflation also at 3.4%, real wage growth was 0.0%. This means workers experienced no net gain in purchasing power over the year. This outcome is an improvement from periods of negative real wages, but it is below the 10-year average real wage growth of -0.2%, signalling ongoing cost-of-living pressures for households.
On a state-by-state basis, Western Australia (+4.0%) recorded the fastest wage growth over the year, followed by the ACT (+3.9%). In contrast, the Northern Territory saw the slowest growth at just 3.0%. In terms of earnings levels, the ACT ($2,260 per week) remains the clear leader, while Tasmania ($1,850 per week) has the lowest average full-time earnings. The divergence highlights how different economic conditions and labour market dynamics are influencing outcomes across the country.
Wage Price Index Growth (YoY)
+3.4%
Above 10-year average of 2.5%
Moderating
Real Wage Growth (YoY)
0.0%
With inflation at 3.4%, purchasing power is flat
Stable
Avg. Annual Earnings (FT)
$107,385
Based on weekly earnings of $2,083
Rising
Fastest Wage Growth (State)
WA (+4.0%)
National average was +3.4%
Rising

Household Consumption

Household spending growth moderates as essential costs bite discretionary spending.
Household consumption reached $372.7bn in Sep-25, up 5.7% annually. Growth is being driven by essential categories, with spending on power surging while transport and restaurant growth falls below trend. Consumption growth is strongest in QLD (+3.7%) and WA (+3.6%), but per capita spending is weakest in VIC (+0.3%) and SA (+0.5%), suggesting a broad slowdown.

Household consumption expenditure totalled $372.7bn in the September 2025 quarter, marking a 5.7% increase over the year. This growth rate is moderating as rising essential costs weigh on budgets. The quarterly National Accounts data shows that on a per capita basis, which strips out the effect of population growth, consumption stood at $13,497 per person. This represented a slower annual increase of 4.1%, highlighting the underlying softness in consumer demand.
A clear divergence has emerged between essential and discretionary spending. Essential categories like power (+28.4%) and health (+8.2%) saw growth well above their 10-year averages. In contrast, spending growth on transport (+3.8%) has collapsed, running a massive -36.5 percentage points below its long-term average. Discretionary spending is also slowing, with growth in cafes and restaurants (+6.4%) falling below its 10-year average of 8.9%, indicating consumers are cutting back where they can.
By state, consumption growth was strongest in Queensland (+3.7%) and Western Australia (+3.6%), while it was slowest in the larger economies of New South Wales (+2.0%) and Victoria. On a per capita basis, the slowdown is more pronounced, with Victoria (+0.3%), South Australia (+0.5%), and New South Wales (+0.7%) recording the weakest growth. This trend, consistent with recent declines in consumer sentiment, suggests households are increasingly cautious in response to higher interest rates and living costs.
Hhconsumptionpower (YoY Growth)
+28.4%
+23.8pp vs 10yr avg of 4.6%
Rising
Hhconsumptiontransport (YoY Growth)
+3.8%
-36.5pp vs 10yr avg of 40.3%
Falling
Per Capita Consumption Growth (VIC)
+0.3%
Slowest in the nation, indicating underlying weakness
Falling
Hhconsumptioncafesrestaurants (YoY Growth)
+6.4%
-2.5pp vs 10yr avg of 8.9%
Falling

Household Spending

Household spending growth moderates as consumers cut back on discretionary items.
Australian household spending reached $232.0bn in Sep-25, up 5.1% annually. This growth is moderating as consumers pull back sharply on discretionary categories, particularly alcohol (-18.0%). Spending growth is strongest in WA (+7.9%) and weakest in Victoria (+4.0%), reflecting varied economic pressures and consumer sentiment across the nation.

Household spending in Australia totalled $232.0bn in September 2025, marking a 5.1% increase compared to a year ago. This translates to an annual expenditure of $33,424 per person. The current per capita spending level is notably 21.1% above the ten-year average, indicating that while year-on-year growth is slowing, the baseline level of spending remains historically elevated.
A clear divergence has emerged between essential and discretionary categories. Spending on essentials like health (+8.1%) and food (+6.4%) saw robust growth. Conversely, discretionary spending shows significant consumer pullback. Alcohol spending plummeted 18.0% against a 10-year average growth of +0.2%. Growth in spending on transport (+4.1%), clothing (+3.3%), and hotels & restaurants (+6.1%) also tracked well below their respective long-term averages, signalling rising consumer caution.
Geographically, spending growth is strongest in Western Australia (+7.9%), the Northern Territory (+7.1%), and Queensland (+6.6%). The weakest growth was recorded in Victoria (+4.0%), the ACT (+4.9%), and New South Wales (+5.1%). This east-west divide suggests that economic pressures from inflation and interest rates are impacting consumer behaviour more significantly in the south-eastern states, aligning with themes of eroding savings and a cautious spending outlook.
Alcohol Spending Growth
-18.0% YoY
vs 10yr avg of +0.2%
Falling
Miscellaneous Spending Growth
+8.7% YoY
vs 10yr avg of +5.3%
Rising
WA Spending Growth
+7.9% YoY
Fastest growing state
Rising
VIC Spending Growth
+4.0% YoY
Slowest growing state
Falling

Inflation & Cost of Living

Inflation accelerated to 3.8% in December, reversing its downward trend.
Annual inflation rose to 3.8% in December 2025, up from 3.4% in November and remaining above the RBA's 2-3% target. The increase was driven by essentials like housing, with Queensland and WA seeing the sharpest price rises. This end-of-year acceleration suggests underlying price pressures are proving persistent.

Inflation in Australia was 3.8% in the year to December 2025, sitting well above the 10-year average and the RBA's 2-3% target band. The annual rate rose from 3.4% in November, indicating a re-acceleration in price pressures at the end of the year. The quickened monthly pace is inconsistent with the RBA's target and reverses some of the prior progress from the inflation peak, suggesting the path back to target may not be smooth. This uptick was a key factor in the RBA's decision to raise rates in early 2026.
Price pressures were most acute in non-discretionary categories. Housing inflation was a standout, with prices rising 5.5% annually, significantly higher than its long-term average. Food and non-alcoholic beverage costs also contributed, rising 3.4% over the year. Further pressure came from Recreation and culture, which saw prices increase by 4.4%, highlighting the broad-based nature of the recent inflation surge.
Inflationary pressures varied across the country. Queensland (+5.2%) and Western Australia (+4.4%) recorded the highest inflation rates, well above the national average. In contrast, price growth was most subdued in Victoria and the Northern Territory (both at 3.1%). This divergence points to stronger underlying demand and cost pressures in states like QLD and WA, leading to more significant cost of living challenges for households in those regions compared to their southern counterparts.
CPI (All Groups) YoY
3.8%
Rose from 3.4% in prior month; remains above RBA's 2-3% target
Rising
Housing CPI YoY
5.5%
A primary driver of inflation, significantly above its 10-year average
Rising
QLD CPI YoY
5.2%
Highest inflation rate among all states and territories
Rising
VIC CPI YoY
3.1%
Among the slowest price growth nationally, nearing RBA target band
Stable

Equities & Superannuation

ASX 200 outperforms its long-term average, pushing market cap to new highs.
The ASX 200 reached 8,869 points as at January 2026, posting strong annual capital growth of 8.5%, well above its 10-year average of 6.1%. In contrast, the broader All Ordinaries index lagged its long-term trend. Total market capitalisation grew to $3.33 trillion, reflecting a positive but volatile start to the year for Australian equities.

The ASX 200 closed at 8,869 points as at January 2026, while the All Ordinaries reached 9,164 points. The benchmark ASX 200 recorded impressive annual capital growth of 8.5%, outperforming its 10-year average of 6.1%. Total market capitalisation rose to $3.33 trillion, up 10.1% over the year. The market is testing record levels, though recent sessions have been volatile. It is important to note these are price indices measuring capital growth only and do not include dividend distributions.
Data on superannuation assets for the corresponding period was not provided. Superannuation assets, representing Australia's vast retirement savings pool, are significantly influenced by the performance of domestic and international equity markets. Growth in the ASX 200 typically contributes positively to the valuation of funds with high allocations to Australian shares, impacting the retirement savings of millions.
Australian shares have demonstrated a resilient, albeit volatile, start to the year. Forecasts from some analysts suggest a strong 2026, potentially driven by a resurgent mining sector. However, investor sentiment remains sensitive to global uncertainty and persistent inflation concerns. The divergence in performance between the ASX 200 and the broader All Ordinaries suggests that gains are currently concentrated in larger, blue-chip companies.
ASX 200 Annual Growth
+8.5%
Above 10-year average of +6.1%
Rising
All Ordinaries Annual Growth
+4.3%
Below 10-year average of +6.3%
Rising
Market Capitalisation
$3.33 trillion
Up +10.1% over the year
Rising
ASX 200 vs All Ordinaries
+2.4pp vs -2.0pp
ASX 200 is outperforming its 10yr avg while the All Ords is underperforming
Stable

Retail Trade

Supermarket turnover dominates at $145.6B as non-discretionary spending outpaces discretionary
Australia's retail landscape reflects entrenched consumer priorities toward essential spending amid cost-of-living pressures, with supermarket and grocery turnover reaching $145.6 billion annually through June 2025—up 137.3% from the September 2006 baseline of $61.3 billion. This non-discretionary category's dominance underscores households' focus on food and basic necessities even as discretionary budgets compress. The "Other Retail" category totaled $70.1 billion (up 160.6% from baseline), while electrical and electronics reached $26.2 billion (up 66.5%) and specialised food stores recorded $13.0 billion (up 79.9%). The divergent growth rates reveal sector-specific dynamics: supermarkets benefit from population growth and food inflation that mechanically lifts nominal turnover; electrical/electronics faces online competition and price deflation that constrains dollar growth despite volume increases; and specialised food captures premiumization trends as consumers trade up to artisan bakeries, butchers, and organic retailers. Retail patterns demonstrate the squeeze on household budgets—necessities claim growing wallet share while discretionary categories face volume pressure. The data encompasses both in-store and online sales, with e-commerce penetration varying dramatically by category and reshaping traditional retail economics.

Supermarket and grocery turnover reached $145.6 billion on an annual rolling basis through June 2025, representing 137.3% growth from the September 2006 baseline of $61.3 billion. This substantial nominal expansion stems from three reinforcing factors: population growth of approximately 30% over the period mechanically increased the customer base; food price inflation substantially outpaced general CPI, with fresh produce, meat, and packaged goods all experiencing multi-decade price increases; and consumption patterns shifted toward eating at home rather than dining out as restaurant prices surged and household budgets tightened. The absolute turnover figure of $145.6 billion translates to roughly $5,300 per capita annually in supermarket spending, highlighting groceries' substantial claim on household budgets. Market concentration in this sector proves extreme, with Woolworths and Coles commanding approximately 65-70% combined market share, followed by Aldi, IGA, and smaller independent operators. This duopoly structure generates ongoing political and regulatory scrutiny around pricing power, supplier treatment, and consumer choice—particularly during periods of elevated food inflation when margin expansion attracts criticism. The pandemic accelerated online grocery adoption, with click-and-collect and home delivery services now comprising an estimated 10-15% of supermarket sales compared to minimal penetration pre-2020. However, the high costs of online fulfillment—picking, packing, refrigerated transport—squeeze margins and raise questions about long-term profitability of digital grocery channels at current pricing.
Electrical and electronics retail turnover totaled $26.2 billion annually through June 2025, up 66.5% from the September 2006 baseline of $15.7 billion—the weakest growth rate among major retail categories despite technology's increasing importance in daily life. This subdued nominal growth masks dramatic volume expansion: Australian households purchased vastly more devices, appliances, and electronics over the period, but unit prices declined sharply due to manufacturing efficiency gains, technology commoditization, and intense online competition. Categories like televisions, computers, and smartphones saw 50-80% price deflation over the past two decades even as specifications improved dramatically, creating a headwind for dollar turnover growth. The "Other Retail" category reached $70.1 billion, up 160.6% from the $26.9 billion baseline—a broad bucket encompassing clothing, footwear, furniture, homewares, sporting goods, and various specialty retail segments. This category's strong nominal growth reflects both population expansion and premiumization trends in segments like activewear, furniture, and homeware where consumers traded up to higher-quality products. However, the aggregate figure conceals sharp divergence: fast fashion and discretionary apparel faced margin pressure and market share loss to online competitors, while furniture and homewares benefited from pandemic-era nesting behaviors and sustained housing market activity that drove demand for furnishings and renovations. Specialised food retail—artisan bakeries, butchers, delis, organic grocers—recorded $13.0 billion in turnover, up 79.9% from $7.2 billion, capturing the premiumization of food consumption as higher-income households sought quality, provenance, and specialty products beyond supermarket offerings.
The retail sector's compositional dynamics reveal broader shifts in consumer behavior, household budget allocation, and competitive landscapes. Supermarkets' commanding 60% share of the captured retail categories ($145.6B of ~$255B total) reflects food's non-discretionary status and limited substitution possibilities—households must eat regardless of economic conditions, providing grocery retailers with defensive earnings characteristics. The weak electrical/electronics growth despite technological proliferation demonstrates how price deflation can overwhelm volume gains, creating challenging economics for bricks-and-mortar retailers competing against online pure-plays with lower overhead structures. Amazon's entry into the Australian market intensified this pressure, forcing incumbent retailers to match prices while bearing higher cost structures—Officeworks, JB Hi-Fi, and Harvey Norman all faced margin compression as they invested in online capabilities and price competitiveness. The rise of specialised food retail signals income polarization: higher-earning households increased spending on premium food experiences and artisan products, supporting independent retailers and niche chains, while cost-conscious households concentrated spending at discount supermarkets and focused on value. Per-capita retail spending growth substantially lagged income growth over the period, indicating declining retail share of household budgets as housing costs, utilities, and services claimed increasing portions of disposable income. Looking forward, retail faces persistent headwinds from elevated mortgage servicing costs that suppress discretionary spending, ongoing e-commerce penetration that advantages low-cost operators, and potential consumption weakness if labor market softening reduces income growth. The essentials-focused spending pattern appears entrenched, with supermarkets likely maintaining dominance while discretionary categories face volume pressure absent meaningful real income growth that restores household purchasing power.
Supermarket and grocery turnover
$145.6B annually
+137.3% from 2006 baseline, dominates retail landscape
Strong
Electrical/electronics growth
+66.5% since 2006
Weakest growth despite tech proliferation—price deflation overwhelms volume gains
Constrained
Other retail category
$70.1B annually
+160.6% from baseline, but conceals divergence between winners and losers
Mixed
Specialised food retail
$13.0B annually
+79.9% from baseline, premiumization trend among higher-income households
Rising
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