Financial News: Australia Household Spending Surges On EV Sales

Australia Household Spending Surges On EV Sales

(RTTNews) - Australia's household spending grew more than expected in June driven by new electric vehicle sales, data from the Australian Bureau of Statistics showed Tuesday.

Household spending rose 0.8 percent on a monthly basis in June. The pace of growth was forecast to ease to 0.2 percent from 1.2 percent in May.

ABS head of business statistics Tom Lay said the increase in discretionary spending reflects continued strength in transport and recreation and culture. Transport spending growth more than doubled to 3.0 percent in June.

"Electric vehicle sales increased significantly over the year and have continued that trend in June, accounting for a growing share of overall new vehicles sales as households adjust their spending behaviour in response to rising fuel prices," said Lay.

Further, air travel spending was the second largest contributor to the strength in transport spending, as it returned to levels seen ahead of the Middle East conflict. At the same time, fuel spending eased from the peak seen in March as global oil prices eased and the reduction in the fuel excise duty continues to pass through to households.

"The 1.4 per cent rise in Recreation and culture came from a few categories in June, with households spending more on electronic goods, performing arts and other live entertainment, and gambling activity likely supported by major sporting events," Lay said.

Earlier in a note, JP Morgan economists said there is limited scope for renewed upside in household spending as the lagged effects of earlier policy tightening continue to flow through.

In addition, the drag from the housing slowdown should build through the second half of 2026, with discretionary goods categories the most exposed, they noted.

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