McKinsey & Company argues Australia can revive its century-long prosperity by restoring productivity, investment, and economic reinvention. Productivity growth has been negative since 2022, while real household disposable income per capita fell 5.2% since mid-2021. By 2100, prosperity could require an electricity system roughly eight times today’s size.
Australia’s next century of plenty
McKinsey & Company
Chris Bradley
Research
31 Pages
Key Takeaways
Productivity stalls: Productivity growth fell to roughly zero in 2015 and turned negative after 2022; 70% of the decline since 2016 reflects weaker investment.
Capital intensity fades: Capital stock per hour grew 4% annually in the decade to 2015, then just 0.5%, versus 1.2% in the US.
Abundance requires scale: By 2100, per-capita income could rise from $60,000 to $210,000, but the electricity system may need to expand eightfold.
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