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 beating market expectations for a 0.3% rise. This marked the strongest producer price growth since the third quarter of 2023, 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 effects of the Middle East crisis were felt across most industries, with shipping delays increasing the cost of imported goods, while higher fuel prices raised expenses for energy-intensive manufacturing processes. Continued demand for rental properties also remained a key contributor to the increase in final demand prices. On an annual basis, producer prices rose 3.6%, following a 3.0% increase in the first quarter, marking the highest yearly growth rate since the first quarter of 2025.