Australia Producer Price Inflation Hits 5-Year Low

Australia’s final demand producer price index rose 1.3% quarter-on-quarter in the second quarter of 2026, accelerating from a 0.4% increase in the previous period and beating market forecasts for a 0.3% rise. This was the strongest price growth since the third quarter of 2023, led by a sharp rise in petroleum refining and petroleum fuel manufacturing (+37.5%) amid higher oil prices resulting from supply disruptions linked to the Middle East war. Heavy and civil construction (2.3%) also provided further upward pressure, amid rising freight and product costs. Property operators (1.0%) remained a key contributor, supported by strong demand and rising residential rents. Partly offsetting these increases was a drop in accommodation services (-12.3%), attributed to seasonal weakness in demand for short-term accommodation during the winter. On an annual basis, the PPI increased 3.6%, following a 3.0% rise in the first quarter, marking the highest growth rate since the first quarter of 2025.

Australia’s final demand Producer Price Index (PPI) climbed 0.4% quarter-on-quarter in Q1 2026, easing from a 0.8% increase in the previous quarter and coming in softer than market estimates of a 0.9% rise. It marked the 23rd consecutive quarter of producer inflation, though it was the softest pace since Q1 2021, with sustained demand in the residential property sector remaining a key contributor to growth. Property operators led the rise (1.0%), supported by strong demand and rising rents for residential properties. Other contributors to quarterly growth were petroleum refining and petroleum manufacturing, which rose 10.1%, and tertiary education services, which increased 2.2%. On an annual basis, producer prices increased 3.0% in Q1, slowing from a 3.5% rise in Q4 and marking the softest pace since Q3 of 2021.

Australia's final demand Producer Price Index (PPI) increased 0.8% quarter-on-quarter in Q4 2025, slowing from a 1.0% rise in the previous quarter and coming in softer than market estimates of a 1.1% increase. It marked the 22nd consecutive quarter of producer inflation, though it eased from the fastest pace since Q3 2024 recorded in Q3, with sustained demand in the residential property sector remaining a key contributor to growth. Property operators led the rise (0.9%), supported by strong demand and rising rents for residential properties. At the same time, residential building construction grew 1.3%, driven by a modest increase in demand for property. On an annual basis, producer prices climbed 3.5% in Q4, the same pace as in Q3.