Australian Company Profits Rise 1.8% in June Quarter as Mining Gains Offset Retail Weakness

Australian company gross operating profits rose 1.8% in the June quarter, recovering from a 1.5% decline in the March quarter as mining posted the strongest contribution to the increase. On a seasonally adjusted basis, profits were 7.4% higher than a year earlier, according to figures released Monday by the Australian Bureau of Statistics.

The result was uneven across industries. Mining company gross operating profits rose 6.8%, while Professional, Scientific and Technical Services gained 4.6% and Manufacturing increased 1.3%. Retail Trade profits fell 5.2% and Wholesale Trade declined 2.9%, partly offsetting the broader rise.

The ABS Business Indicators release, published on August 31 at 11:30 a.m. AEST, also showed wages and salaries rising 1.4% in the quarter and 5.7% from a year earlier. Inventories fell 0.2% in chain-volume terms, while sales of goods and services increased in nine industries and fell in six.

Mining powers the rebound in company profits

Mining provided the clearest support to the June-quarter profit result. The industry’s 6.8% increase followed a period in which total company profits had already been volatile, with the economy-wide measure rising 6.0% in the December 2025 quarter before falling 1.5% in March 2026. The latest gain therefore restores positive quarterly growth without matching the size of the December increase.

Mining activity also strengthened on the sales side. The ABS reported a 3.3% increase in mining sales of goods and services in chain-volume terms, the largest rise among the industries highlighted in the quarterly analysis. Professional, Scientific and Technical Services recorded a 2.3% sales increase, while Transport, Postal and Warehousing rose 1.2% and Information Media and Telecommunications gained 1.3%.

The relationship between sales and profits was not uniform. Manufacturing profits rose 1.3% even though manufacturing sales volumes slipped 0.1%. Construction profits gained 1.7% alongside a 0.5% rise in sales volumes, while Accommodation and Food Services profits increased 3.2% and sales volumes rose 0.5%. Those differences are a reminder that the profit measure reflects more than the direction of sales volumes alone.

Several industries recorded profit declines even as the overall total moved higher. Financial and Insurance Services fell 19.7%, Other Services dropped 11.0%, and Transport, Postal and Warehousing declined 2.4%. The ABS identified Retail Trade and Wholesale Trade as the main industries partly offsetting the aggregate profit increase, rather than attributing the national result to a broad-based improvement across every sector.

Retail profits fall even as wages and sales edge higher

Retail Trade stood out because its quarterly indicators moved in different directions. Company gross operating profits fell 5.2%, but retail sales volumes rose 0.4% and wages and salaries increased 1.0%. Wholesale Trade showed a similar split, with profits down 2.9% while sales volumes rose 0.6% and wages increased 0.9%.

The ABS did not assign a single cause to the retail or wholesale profit declines, so the figures do not by themselves establish whether the weakness came from margins, product mix, costs or another factor. The release instead presents separate measures of profits, wages, inventories and sales. Reading those measures together shows that weaker profit outcomes in the two trade sectors did not coincide with falling sales volumes during the quarter.

Across the economy, wages and salaries rose in every industry covered by the measure. Financial and Insurance Services increased 2.6%, Professional, Scientific and Technical Services rose 1.4%, and Construction gained 1.4%. Mining wages were up 0.9% and Manufacturing increased 1.2%. Information Media and Telecommunications recorded a 4.3% rise, the largest percentage gain in the industry table.

Inventories moved lower overall. The seasonally adjusted chain-volume measure fell 0.2% in the June quarter and was 0.4% below its year-earlier level. Mining inventories dropped 4.8% and Manufacturing fell 0.9%, while Wholesale Trade inventories increased 1.7% and Retail Trade rose 1.0%. Electricity, Gas, Water and Waste Services recorded a 13.1% decline, though the ABS highlighted Mining and Manufacturing as the main contributors to the total fall.

The ABS profit measure is not the same as national accounts profit

Company gross operating profits in the Business Indicators release are an important signal for the corporate sector, but the ABS cautions against treating them as identical to the gross operating surplus measure used in the Australian National Accounts. The Business Indicators series is built from the Quarterly Business Indicators Survey and covers estimates of private-sector profits, sales, wages and inventories across selected industries.

The methodology also defines company gross operating profit as an underlying profit measure that excludes several items from company profits before income tax. These include interest income and expenses, depreciation and amortisation, net foreign-exchange gains or losses, gains or losses from the sale of non-current assets, and net unrealised revaluation gains or losses. That construction is one reason the measure should not be read as a simple substitute for a company’s accounting profit.

For the June quarter, the ABS said valuation changes in business inventories affected comparisons with national accounts measures. An Inventories Valuation Adjustment of A$3.66 billion will be applied in calculating gross operating surplus for private non-financial corporations in the national accounts, up A$1.219 billion from A$2.441 billion in the March quarter. No equivalent adjustment is made to company gross operating profits in the Business Indicators release.

The agency says movements in company gross operating profits are an appropriate indicator for gross operating surplus, but the two series will not necessarily show the same seasonally adjusted quarter-to-quarter movement because of the inventory adjustment, annual benchmarking and differences in seasonal factors. The next Business Indicators release, covering the September 2026 quarter, is scheduled for November 30.