Australia Corporate Profits Unexpectedly Drop in Q2

Corporate profits in Australia unexpectedly fell by 2.4% quarter-on-quarter in Q2 2025, missing market forecasts of a 1.2% increase, following an upwardly revised 1.0% contraction in Q1.

The decline was driven by profit falls in financial and insurance services (-7.5% vs -11.9% in Q1), administrative and support services (-11.4% vs -7.2%), mining (-0.5% vs -6.3%), wholesale trade (-4.6% vs 3.7%), transport and warehousing (-1.6% vs 4.2%), rental and hiring services (-3.6% vs 0.8%), electricity, gas, water and waste services (-1.3% vs -3.0%), manufacturing (-9.3% vs 9.5%), arts and recreation services (-3.1% vs 0.5%), and retail trade (-5.8% vs 5.0%).

By contrast, profits rose more strongly in accommodation and food services (3.5% vs 0.7%) and rebounded in professional, scientific, and technical services (1.8% vs - 1.9%).

On an annual basis, profits declined by 3.3% through the year to June, after an upwardly revised 5.2% drop in Q1, marking the smallest yearly decline in a year.