Australian GDP grew 0.4% in June quarter as household spending slowed

Australia's economy expanded by 0.4 per cent in the June quarter of 2026, taking growth through the year to 2.1 per cent.

The Australian Bureau of Statistics released the quarterly national accounts on Wednesday, reporting subdued household spending alongside lower private business investment.

ABS head of National Accounts Grace Kim said economic growth remained subdued as consumers acted cautiously.

"While increased spending and business investment occurred in pockets of the economy, imports supported much of the growth, moderating its contribution to overall GDP growth," Ms Kim said.

Household consumption rose 0.4 per cent during the quarter, with soft spending recorded across most categories.

The ABS said the Middle East conflict affected consumer behaviour, reducing fuel consumption due to higher prices and curbing domestic and international travel.

Vehicle purchases rose 10.3 per cent as buyers continued switching to electric models.

Ms Kim said the EV uptake may reflect households taking a longer-term approach to living costs to lower ongoing expenses.

Private business investment fell 0.5 per cent in the quarter after equipment spending for data centre fit-outs dropped from a peak in the March quarter. Data centre spending remained at elevated levels, while purchases of aircraft and industrial transport equipment partly offset the decline.

Compared to the June quarter of 2025, private business investment was up 10.4 per cent.

In external trade, export volumes rose 0.8 per cent, led by a rebound in coal production following previous weather disruptions.

Goods imports climbed 2.4 per cent on vehicle and aircraft deliveries, but services imports fell 4.9 per cent as conflict disrupted overseas travel.

"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," Ms Kim said.

Total imports rose 0.5 per cent, leaving net trade with a 0.1 percentage point contribution to quarterly GDP.

Compensation of employees rose 1.5 per cent on competition for skilled labour, higher wages, and bonus and redundancy payments.

The household saving-to-income ratio edged up from 6.4 per cent to 6.5 per cent.

For the full 2025-26 financial year, GDP increased by 2.4 per cent, while GDP per capita rose 0.8 per cent.

Ms Kim said annual growth outpaced the previous two years, supported by service industries that account for more than 70 per cent of Australian economic output.