AI productivity gains could deliver up to $116bn boost to Australia’s economy

• AI could add between $95 billion and $116 billion to Australia’s economy by 2036 and support 36,000 to 44,000 additional jobs, according to EY-Parthenon modelling.
• The uplift would be underpinned by a 2.0 per cent to 2.4 per cent increase in multifactor productivity and $31 billion to $38 billion in additional investment.
• AI adoption is expected to reshape labour demand across sectors, with construction recording the largest jobs increase while agriculture and mining are expected to require fewer workers under the modelled scenarios.

SYDNEY, AUSTRALIA – 6 AUGUST 2026

Artificial intelligence (AI) could deliver a much-needed productivity lift for Australia and add between $95 billion and $116 billion to the economy over the next decade, according to new EY-Parthenon modelling.

The analysis finds increased AI adoption could boost real GDP by between 2.6 per cent and 3.2 per cent by 2036, support around 36,000 to 44,000 additional full-time equivalent jobs and drive between $31 billion and $38 billion in additional investment.

EY Regional Chief Economist, Oceania, Cherelle Murphy said the modelling showed AI could help address Australia’s long-running productivity challenge if businesses convert the technology into higher investment, capacity and output.

“Productivity is the main driver of long-term economic expansion and improvements in living standards, but Australia’s performance has been weak over the past decade,” Murphy said.

“Labour productivity growth has averaged just 0.3 per cent a year over the past 10 years, less than a quarter of the rate recorded in the previous decade. That is why the potential productivity uplift from AI matters, not just as a technology story, but as an economic growth story.”

The modelling estimates are based on cautious assumptions about how much AI could improve productivity, aligned with findings from the Productivity Commission.

“The analysis shows that if AI-driven productivity gains flow through to investment, capacity and output, they could deliver a meaningful lift to economic growth,” Murphy said.

“Construction is expected to see the largest increase in full-time jobs as AI adoption lifts demand for new capital, equipment, systems and infrastructure, including the data centres and supporting infrastructure needed to enable the technology,” she said.

Wholesale trade, retail trade, and transport and warehousing are also expected to benefit as higher productivity flows through to real wages, consumption and services demand.

The sector-level projections highlight the uneven way AI adoption is expected to affect Australia’s labour market under the modelled scenarios.

“In contrast, agriculture and mining are expected to record reductions in roles as automation and technological efficiency reduce labour needs, lower costs and improve the international competitiveness of Australia’s exports,” Murphy said.

“The jobs story is not one of AI simply replacing workers across the economy. The modelling shows employment demand shifting toward sectors that benefit from stronger investment and household spending, while capital-intensive industries need fewer workers,” Murphy said.

“Realising the economic benefits of AI will depend critically on workforce mobility and targeted reskilling. A key priority for employers and government should be helping workers move into the sectors and parts of businesses where demand is expected to grow.”

-ENDS-

About the modelling

EY-Parthenon used the EY GEM model to estimate the potential impact of AI adoption on Australia’s economy. The modelling assessed AI-driven labour productivity gains at the occupational level and traced how those gains could flow through to industries, investment, employment and whole-of-economy growth.

Three scenarios were modelled:

• a base case reflecting the central estimate of AI-driven productivity gains at the occupational level;
• a low scenario in which productivity gains are 10 per cent below the base case; and
• a high scenario in which productivity gains are 10 per cent above the base case.

The resulting findings should be interpreted as indicative estimates of the potential economy-wide impact of AI adoption.

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Media Contact:

Hamish Goodall – Corporate Affairs Manager, Oceania
Phone: 0467 346 364
Email: Hamish.goodall@au.ey.com