Quarterly productivity bulletin – March 2025

‘No flash in the pan’: Productivity problem a long-term challenge

Australia's productivity continued to stagnate in the December quarter, suggesting that our productivity problem may be part of a long-term trend.

The Productivity Commission's latest quarterly productivity bulletin shows labour productivity declined by 0.1% in the December quarter and by 1.2% over the year.

‘The COVID pandemic was a massive global economic shock. The pandemic and the policy response to it drove a sharp rise – and then a crash – in measured productivity. Now that the dust has settled, we're back to the stagnant productivity we saw in the period between 2015 to 2019 leading up to the pandemic.’

‘The data makes it clear that our productivity problem is not a flash in the plan – this is a long-term, structural challenge that requires dedicated attention from government and industry.’

A new article, authored by Jeremy Kamil, takes a closer look at the drivers of the COVID ‘productivity bubble’. The PC will expand further upon this work in a detailed research paper to be released in the future.

‘Ultimately the COVID productivity bubble was just that: a bubble. We saw a sharp rise in productivity driven by the lockdowns which was then wiped out as lockdowns ended and hours worked reached record highs,’ said Dr Robson.

‘There are lessons to be learned from these fluctuations, but they aren't likely to have a meaningful long-term effect on productivity.’

‘The real issue is that Australia's labour productivity has not significantly improved in over 10 years. With global policy uncertainty again on the rise, addressing productivity directly via targeted reforms will be the best way to sustainably boost Australians’ living standards,’ said Dr Robson.

‘To that end, the PC is undertaking a program of five inquiries, each focusing on a different pillar related to productivity. We will identify the highest priority reforms under each of the five pillars which will improve Australia’s long-run productivity growth.’

Media requests

Media team – 02 6240 3330 / media@pc.gov.au

Quarterly productivity bulletin – March 2025

• Labour productivity update
• Update from Alex Robson
• Productivity: There and back again
• References
• Copyright and publication detail

Appendix: Supporting evidence

• A primer on productivity
• Detailed productivity statistics
• Productivity data revisions