Two in every five trains running through central parts of Sydney are overcrowded during the morning peak hour, the latest figures show, in a sign of the rapidly rising demand for public transport and the strain that it's placing on the aged rail system.

The statistics contained in the NSW Auditor-General's report on the state's transport agencies, released on Friday, show a significant deterioration in overcrowding during the morning peak between September 2016 and March this year.

Some 41 per cent of trains passing through Central Station during the morning rush hour in March were overcrowded, compared with 25 per cent six months earlier.

The T1 Western, the T4 Illawarra and the T2 Inner West lines have the highest levels of overcrowding.