Australian company gross operating profits declined by 0.5% in the March quarter of 2025, according to fresh data from the Australian Bureau of Statistics (ABS), falling well short of expectations for a 1.1% increase and significantly below the 6% growth recorded in the previous quarter.
The mining sector was the primary drag on overall profits. Gross operating profits from mining firms fell by 6%, down from A$51.6 billion to $48.53 billion.
Meanwhile, wages and salaries across the economy rose by 1.4%, signalling persistent cost pressures despite softer profit margins.
Business inventories posted stronger-than-expected growth, lifting 0.8% in the March quarter compared with forecasts and the previous quarter’s 0.2% increase.
Meanwhile, Australia’s seasonally adjusted current account recorded a deficit of $14.66 billion in the March quarter, a $1.7 billion improvement from the revised $16.3 billion deficit in the December quarter.
“The rise in the current account balance was led by a $1.9 billion reduction in the net income deficit, which was partly offset by a $0.2 billion fall in the goods and services surplus,” said Tom Lay, Head of International Statistics at the Australian Bureau of Statistics (ABS).
Lay noted that falling commodity prices, particularly coal, played a key role: “Commodity price falls, notably coal, led to Australian mining businesses seeing lower profits flow to foreign direct investors, which reduced Australia’s income outflows.”
Despite the drag on the trade balance, exports of goods rose by 2.9% in the March quarter, marking the first back-to-back increase since Q2 2022. This followed a 2.3% rise in the previous quarter.
The standout contributor was non-monetary gold, both in terms of volume and price. “The $4.8 billion rise in Non-monetary gold exports was the highest on record. It was led by $11 billion of Non-monetary gold exports to the USA, which was larger than the total combined value of Non-monetary gold exports to the USA over the past four years,” Lay said.
In volume terms, the balance on goods and services is expected to detract 0.1 percentage points from quarterly GDP growth for Q1 2025.
