Australian industry conditions have declined materially in March, with companies saying fuel shortages and prices are impacting across the economy.
The Australian Industry Index in March fell 19.9 points to -23.6, the steepest monthly decline since the initial pandemic phase of early 2020. Industrial activity, employment, new orders and sales indicators all fell markedly in response to the emerging energy crisis.
Uncertainty was the main factor, with 30% reporting volatility in fuel prices, freight and/or supply arrangements because of the energy crisis. More than a quarter (26%) of businesses said rising costs were a major pressure – in fuel, freight, raw materials, resins, plastics and packaging.
Almost one in ten businesses (9%) cited workforce pressures, including the impact of high fuel prices on staff and travel costs keeping people away from the workplace.
"Our monthly real-time collection of data on industry activity and sentiment makes it clear that the impacts of the fuel crisis are already being felt across the economy," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
"The sheer uncertainty that has been created is already distorting supply chains, creating demand pressures and impacting input costs. Longer range concerns about cash flow and worker availability are already starting to emerge."
Construction reported a sharp decline in new orders owing to increased uncertainty and anticipated cost pressures because of fuel and materials, increasing the challenge of dealing with the housing supply crisis.
"It is clear from the emerging data that this fuel crisis will have long-term business implications that will flow through to the broader economy, impacting prices and supplies of a wide range of goods and services. We are, unfortunately, only at the start of seeing its impacts," Mr Willox said.
The full report is available here: Australian Industry Index – March 2026
