Estimates of Industry Multifactor Productivity

Latest release

Updates estimates of industry multifactor productivity (MFP) for industries and market sector aggregates

Reference period
2024-25 financial year
Release date and time
06/02/2026 11:30am AEDT

Key statistics

In 2024-25, on an hours worked basis: 

  • the market sector MFP fell 0.5%
  • market sector labour productivity decreased 0.2%, following a 1.0% increase in 2023-24
  • MFP fell in nine of sixteen market sector industries
  • the largest MFP fall was in Mining, while the largest rise was in Agriculture, forestry and fishing.

Market sector productivity

On an hours worked basis, market sector MFP fell 0.5% in 2024-25, following a 0.1% increase in 2023-24. 

Market sector gross value added (GVA) increased by 0.9%, representing the second slowest growth since the time series commenced in 1994-95. By comparison, combined labour and capital inputs grew 1.4%, reflecting capital services growth of 1.8% and a 1.0% rise in hours worked. 

Market sector labour productivity declined by 0.2%, driven by subdued growth in GVA alongside a moderate rise in hours worked in 2024-25. 

On a quality adjusted labour input (QALI) basis, labour productivity fell 0.7% while MFP declined by 0.8%. The larger decline in labour productivity and MFP on a QALI basis reflected a positive contribution from the modelled composition of labour due to educational attainment and work experience. Further information on the QALI measure is available in Understanding labour quality and its contribution to productivity measurement.

  1. Natural log growth * 100
Growth (a) for market sector (%)
 Hours worked basisQuality adjusted hours worked basis
Multifactor Productivity-0.5-0.8
Gross Value Added0.90.9
Labour Input1.01.6
Capital Input1.81.8
Labour Productivity-0.2-0.7
  1. Natural log growth * 100

Estimates of industry productivity

In 2024-25, MFP declined in nine of the sixteen market sector industries. Mining recorded the strongest fall in MFP (-3.3%), reflecting production disruptions associated with poor weather. Construction MFP continued to decline (-2.8%), driven by strong growth in hours worked required to complete large-scale infrastructure projects. By contrast, the largest MFP rise was in Agriculture, forestry and fishing (9.9%), supported by favourable weather conditions. Arts and recreation services recorded the second largest rise (5.2%) in MFP due to weakness in hours worked alongside record attendance at major sporting events.

  1. Natural log growth * 100

Mining recorded the fifth consecutive annual decline in MFP

MFP fell 3.3% in 2024-25, marking the fifth consecutive annual decline. The fall in MFP reflected: 

  • a 1.1% fall in GVA, driven by weaker coal, iron ore and gas production due to weather-related disruptions and maintenance activity, which was partly offset by growing demand for spodumene to support lithium production
  • a 1.5% rise in capital services, representing the second highest growth since 2017-18, due to strong investment in non-dwelling construction in earlier years
  • a 5.6% rise in hours worked, representing additional use of labour to restore operational capacity during weather disruptions and unplanned maintenance.
  1. Natural log growth x 100

Construction MFP fell in nine years over the last decade

MFP fell 2.8% in 2024-25, while labour productivity fell 2.9%. The fall in both MFP and labour productivity reflected:

  • flat GVA (0.1%) following three consecutive years of growth, driven by the completion of heavy and civil engineering projects, coupled with reduced investment in offices and warehouses
  • a 3.0% rise in hours worked, due to ongoing labour requirement associated with the completion of large-scale projects
  • a 2.7% rise in capital services, due to the strength in investment in non-dwelling construction in earlier years.
  1. Natural log growth x 100

Agriculture, forestry and fishing showed the largest rise in MFP

MFP rose 9.9% and recorded the largest increase across all market sector industries in 2024-25. The rise in productivity was driven by:

  • strong growth in GVA (8.5%), supported by strong wheat harvest under favourable rainfall conditions, along with the growth in livestock coinciding with strong international demand for Australian meat
  • hours worked, which grew 1.8%, associated with increased harvesting activities
  • the strength in GVA resulted in robust growth in labour productivity (6.7%), rebounding from the decline in the previous year.
  1. Natural log growth x 100

Arts and recreation services recorded a solid gain in MFP, reversing recent declines

MFP rose 5.2% in 2024-25, with solid GVA growth alongside a fall in hours worked. The increase in MFP reflected: 

  • an increase in GVA (3.6%), reflecting record attendance at major sporting events and increased number of live performances and festivals
  • hours worked fell 3.1%, following three consecutive annual rises, due to weakness in small venues and gambling activities
  • capital services rose 2.9%, driven by non-dwelling construction.
  1. Natural log growth x 100

Productivity growth cycles

Growth cycle analysis can minimise the effects of temporary influences - such as variations in capital utilisation- by averaging productivity measures over a cycle. Further information on productivity growth cycle is available in the Feature Article: Experimental Estimates of Industry Value Added Growth Cycles in the 2015-16 issue of Estimates of Industry Multifactor Productivity.

2021-22 has been identified as the most recent productivity growth cycle peak for the market sector. In the latest growth cycle (2017-18 to 2021-22), market sector GVA growth was relatively subdued, averaging 1.6% per year. 

Over this period, MFP contributed an average of 0.8 percentage points (ppts) to GVA growth per year. This shows an increased MFP contribution from the previous growth cycles (2003-04 to 2009-10, and 2009-10 to 2017-18), in which MFP contributed -0.2 ppts and 0.7 ppts, respectively. 

Capital services contributed 0.7 ppts to GVA growth in the latest cycle, a smaller contribution than the 1.5 ppts recorded in the previous cycle. 

Contribution to output growth (hours worked basis), by growth cycle, average percentage points
 1998-99 to 
2003-04
2003-04 to 
2009-10
2009-10 to 
2017-18
2017-18 to 
2021-22
GVA growth (a)3.63.02.81.6
Capital services 1.72.21.50.7
Hours worked 0.91.00.60.1
Multifactor productivity1.0-0.20.70.8
  1. Natural log growth x 100

Direct Aggregation Across Industries (DAAI)

Experimental productivity measures (Tables 20-23) present the estimated industry contributions to market sector labour productivity growth under an alternative decomposition framework, the direct aggregation across industries (DAAI) approach (available at Experimental productivity growth accounts). This framework enables the separation of direct productivity and hour reallocation effects. In addition, it allows tracking industry origins of the market sector’s labour productivity growth.

Contribution to market sector labour productivity growth - by industry, 2024-25, percentage points (a) (b)
 Direct productivityHour reallocation
A Agriculture, forestry and fishing0.20.0
B Mining-1.00.7
C Manufacturing-0.20.0
D Electricity, gas, water and waste services0.00.1
E Construction-0.3-0.1
F Wholesale trade-0.10.0
G Retail trade-0.1-0.1
H Accommodation and food services-0.1-0.1
I Transport, postal and warehousing0.20.0
J Information, media and telecommunications0.3-0.1
K Financial and insurance services0.40.0
L Rental, hiring and real estate services0.00.0
M Professional, scientific and technical services-0.10.0
N Administrative and support services0.20.1
R Arts and recreation services0.10.0
S Other services0.00.0
Total contribution-0.50.4
  1. The estimates are from Table 22 of Data downloads
  2. The difference between the headline market sector labour productivity growth and the total contribution from the underlying industries is attributable to aggregation methodology and rounding error.

The direct effect is measured as the sum of direct labour productivity industry contributions. In 2024-25, the direct effect detracted 0.5 ppts from the growth in market sector labour productivity. Within the direct effect, the falls in labour productivity in Mining and Construction detracted 1.0 ppts and 0.3 ppts from aggregate labour productivity growth, respectively. In contrast, productivity rises in Financial and insurance services and Information, media and telecommunications were the largest contributors to market sector labour productivity growth.  

The hour reallocation effect captures compositional changes to hours worked across industries. In 2024-25, the reallocation effect contributed 0.4 ppts to the growth in market sector labour productivity, largely offsetting the direct industry effect. Within the reallocation effect, reallocation of hours worked to Mining which has a high labour productivity level contributed 0.7 ppts to market sector labour productivity growth.

Revisions in this issue

This publication incorporates revisions as follows:

Data downloads

Time series spreadsheets

Data files
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