CPA Australia has said that “stronger-than-expected” economic growth in the June quarter must not distract from an ongoing productivity slump in the country.
The observation comes after Australia’s gross domestic product (GDP) rose by 0.4% in the June quarter of 2026 and by 2.1% compared to last year, according to figures released by the Australian Bureau of Statistics (ABS).
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
CPA Australia Business and Investment lead Gavan Ord explained that the growth was largely driven by Australians working longer hours.
Higher exports and increased spending in select sectors also contributed to the expansion. Ord also pointed out that productivity lagged behind.
He said: “While the headline GDP figure is slightly better than expected, productivity remains the economy’s weak spot.
“Output per hour worked is lower than it was a year ago – we are working more, not working smarter.”
Stronger demand for electric vehicles and higher coal exports also played a role in supporting growth.
Ord added: “The real story behind today’s figures is Australia’s continuing productivity problem.
“Without stronger productivity growth, it becomes more difficult to lift wages sustainably, improve living standards and strengthen long-term prosperity.”
Ord called for governments to prioritise reforms that ease costs and remove barriers for businesses.
On the role of AI, Ord acknowledged its potential while stressing it is not a complete solution.
“AI has the potential to be a significant driver of future productivity growth, as Treasury has recognised,” he added.
“However, AI alone cannot solve Australia’s productivity challenge. Structural reforms remain essential to improve our tax and regulatory settings and give businesses greater confidence to invest, innovate, create jobs and expand.”
