Standards have not improved in the main, although some sectors such as special and independent schools are maintaining their high performance.
However, one leading teaching union warned teachers not to be despondent as there were “definite signs of hope”.
The Welsh schools inspectorate, Estyn, found that in primary schools during 2012/13, standards were similar to the previous year with 72 per cent being judged good or better and 28 per cent adequate.
Standards in secondary schools were generally more divided, with more excellence than in primary schools, but also more schools judged as unsatisfactory. Since the previous year, the proportion of secondary schools that are unsatisfactory has increased from 14 to 23 per cent.
In other sectors, such as further education, adult and community learning and local authorities, standards are variable, with no excellence this year.
Chief inspector Ann Keane said: “We have been using the same framework in inspections over the last three years and I had hoped to see improvements in performance by now.
“It is disappointing that excellent schools remain in a small minority and that so many secondary schools are in need of follow-up inspections. Next year we shall be returning to over two-thirds of secondary schools and around half of primary schools to undertake follow-up visits.
“What schools and the post-16 sector need to improve is the quality of teaching, assessment, literacy and numeracy, self-evaluation and Welsh second language. I know that improvement is possible and that excellence is possible, as we have seen in the many case studies that are quoted in the annual report.”
The inspectors found that it was clear that strong and visionary leadership was one of the key factors in making improvements, but the quality of leadership in schools was still uneven.
Estyn warned that few schools and individuals could sustain high quality in isolation and a good deal of organisational improvement required stronger efforts to work in partnerships with other schools, parents, agencies and local authorities.
Responding to the report, Dr Philip Dixon, director of ATL Cymru, said: “It would be easy to become despondent reading the chief inspector’s report of progress made in the last year. Too much seems at a standstill and some sectors are going backwards.
“However, as one reads deeper, there are definite signs of hope. There is some excellent, innovative practice being developed and most schools which have been revisited by Estyn are showing improvement.
“It’s also heartening to read that some schools are reducing the effects of poverty quite considerably.”
He added: “The report highlights the absolute crucial importance of good quality professional development for staff and leaders. The Welsh government should take heed and prioritise that need.
“The chief inspector’s observation about the lack of attention given to pupils’ views on what and how they learn is a timely reminder that children and young people are at the heart of the system, and that must never be forgotten by anyone involved in education.”