Ashes crowds help boost economic growth to three-year high
The Australian economy had its best performance in almost three years, expanding by 0.8 per cent in the final three months of 2025.
The Australian Bureau of Statistics reported that annual growth increased to 2.6 percent, while GDP per capita also increased.
Productivity was flat this quarter but rose a full percentage point last year. Real unit labor costs decreased by 0.6 percent in the quarter, 0.1 percent lower than last year.
The growth comes from various areas of the economy, said Grace Kim, the bureau’s head of national accounts.
“There was broad-based economic growth this quarter, with increases observed in the vast majority of industries. Public and private demand each contributed 0.3 percentage points to GDP growth,” he said.
“GDP per capita rose for the fourth quarter in a row and is now 0.9 per cent higher than a year ago, the highest full-year growth since the December quarter 2022.”
Household spending increased by 0.3 percent in the quarter, for an annual increase of 2.4 percent. Discretionary spending rose 0.4 per cent, thanks to Black Friday and Boxing Day sales, as well as various sporting events such as the Ashes Test series.
The bureau noted that spending on electricity, gas and other fuels fell 9.5 percent this quarter. Actual electricity use fell 3.3 percent.
Private investment rose for the fifth consecutive quarter as businesses continued to increase spending on areas such as data centers and aircraft. Housing investment added 0.1 percentage points to growth due to the increase in apartment construction.
Public investment increased at all levels of government.
State and local government spending rose one percent, driven in part by utility rebates and spending on health, education and police.
Federal government spending increased 0.8 percent. Much of this was due to an increase in federal investment and, largely, an increase in defense spending.
The fastest growth at the state level was in South Australia, where state final demand rose 1.2 per cent in the quarter. The 2.5 percent increase in public expenditures was effective in this.
Shane Wright is senior economic correspondent for The Age and The Sydney Morning Herald.Connect with: X or email.
