FX.co ★ Australia Producer Price Inflation Accelerates in Q2

Australia’s final demand Producer Price Index (PPI) rose 1.3% quarter-on-quarter in the second quarter of 2026, accelerating from a 0.4% increase in the previous quarter and surpassing market expectations for a 0.3% gain. This was the strongest pace of producer price growth since the third quarter of 2023, largely driven by higher energy costs—particularly for crude oil, petrol, and diesel—following supply disruptions caused by the closure of the Strait of Hormuz for much of the quarter. The Middle East crisis affected most industries: shipping delays pushed up the cost of imported goods, while elevated fuel prices increased expenses for energy-intensive manufacturing. Robust demand for rental properties also remained a significant contributor to the rise in final demand prices. On an annual basis, producer prices climbed 3.6%, up from 3.0% in the first quarter, marking the fastest yearly growth rate since the first quarter of 2025.