Australia’s economy regained some momentum in the June quarter, with gross domestic product up 0.6 per cent on the previous three months and 1.8 per cent through the year, according to seasonally adjusted, chain volume estimates from the Australian Bureau of Statistics. For the 2024–25 financial year to date, GDP rose 1.3 per cent.
Tom Lay, ABS head of national accounts, said: “Economic growth rebounded in the June quarter following subdued growth in the March quarter, which was heavily impacted by weather events.”
Domestic demand did most of the lifting, as household spending accelerated and government consumption rose. Public investment, however, fell sharply and was the biggest drag on growth.
Household consumption grew 0.9 per cent, up from 0.4 per cent in March. Discretionary spending led with a 1.4 per cent rise, while essential outlays increased 0.5 per cent. “End of financial year sales and new product releases contributed to rises in discretionary spending on goods including furnishings and household equipment, motor vehicles and recreation and culture goods,” Mr Lay said. “Households took advantage of the proximity of Easter to ANZAC day to extend their holiday break, resulting in rises in discretionary services such as hotels, cafes and restaurants and recreation and culture services,” he added.
Within essentials, health was strongest as more people accessed medical services during a tough flu season. Food spending also picked up, aided by heavier promotional activity at major supermarkets.
Public investment dropped 3.9 per cent, the largest fall since September 2017 outside the Covid period, led by lower state spending on transport and health projects and a decline in defence investment. Despite the quarterly fall, defence investment remains high over the year.
Government final consumption rose 1.0 per cent, supported by national non-defence spending. Higher social benefits to households, increased demand for Medicare and Pharmaceutical Benefits Scheme services, and Australian Electoral Commission outlays for the 2025 federal election all contributed. Defence consumption also increased on the back of military exercises, while state and local spending eased as electricity rebates wound down.
Private investment was broadly flat, up 0.1 per cent, as gains in intellectual property products and housing were offset by weaker non‑dwelling construction. New engineering work fell amid lower activity in renewable energy projects and mining, and new building investment dipped with declines in offices and warehouses.
Net trade added 0.1 percentage points to growth. Exports rose, led by iron ore and LNG after production rebounded from severe weather disruptions in the March quarter. Services exports also increased, driven by more short‑term visitors, particularly those travelling to visit family and friends. Imports detracted, with services imports led by travel as average spending per overseas trip rose on more long‑haul destinations such as the UK and Italy. Goods imports also weighed, notably cars and clothing and footwear.
GDP per capita increased 0.2 per cent in the quarter after falling in March. For the financial year so far, GDP per capita declined 0.4 per cent.
Households saved less. The saving ratio slipped to 4.2 per cent from 5.2 per cent as nominal spending (up 1.5 per cent) outpaced a 0.6 per cent rise in gross disposable income. Compensation of employees rose 1.2 per cent. Fewer severe weather events meant insurers paid out fewer claims than in March, which reduced total household income relative to the previous quarter.
Price and income metrics were mixed. The terms of trade fell 1.1 per cent and the GDP implicit price deflator edged up 0.1 per cent. Real net national disposable income rose 0.5 per cent. Productivity improved modestly, with GDP per hour worked up 0.3 per cent in the quarter, while real unit labour costs increased 0.7 per cent.
The ABS noted Easter Monday and ANZAC Day fell three days apart this year, an unusual timing that may have influenced hours worked and household consumption as more people took extended leave. Statistical tests so far show no significant impact, and no extra seasonal adjustments have been applied.
Source: Australian Bureau of Statistics.
