Households remain cautious
Household consumption rose 0.4% during the quarter, although the ABS said spending remained subdued across most categories.
The Middle East conflict influenced household behaviour, with fuel consumption falling in response to elevated prices and Australians cutting back on both domestic and international travel.
One area where spending rose sharply was vehicles, with purchases increasing 10.3% as households continued to shift towards electric vehicles.
“The rise in electric vehicle purchases may have reflected households taking a longer-term approach to cost of living pressures, with some choosing EVs to help reduce ongoing expenses,” Kim said.
The household saving-to-income ratio was broadly steady, edging up from 6.4% to 6.5%.
Middle East conflict weighs on travel
The disruption to international travel also showed up in Australia’s trade figures.
Imports of services fell 4.9% as the Middle East conflict affected Australians’ overseas travel plans.
“The number of Australians travelling overseas for the northern hemisphere summer fell for the first time since the COVID-19 pandemic, significantly reducing international travel expenditure,” Kim said.
Goods imports moved in the opposite direction, rising 2.4% as Australia imported more cars and planes.
Exports increased 0.8%, led by coal following higher production after weather disruptions in the March quarter.
Overall, exports grew faster than imports, with net trade adding 0.1 percentage points to quarterly GDP growth.
Data centre investment eases
Private business investment fell 0.5% during the quarter, with investment in machinery and equipment for data centre fit-outs declining after a substantial increase in the March quarter.
The ABS said data centre investment nevertheless remained at elevated levels.
Higher purchases of planes and industrial transport equipment partly offset the decline, while private business investment remained 10.4% higher than a year earlier.
GDP per person rises over the financial year
The figures also provide the first estimate of economic growth across the full 2025-26 financial year.
GDP increased 2.4% compared with the previous financial year, while GDP per capita rose 0.8%.
“Annual growth outpaced the previous two years with stronger growth from service industries which account for over 70 per cent of economic activity in the Australian economy,” Kim said.
Compensation of employees increased 1.5% in the June quarter, reflecting continued competition for skilled workers, higher wages, and bonuses and redundancy payments made during the period.
