Australian Household Spending Surges Amid Electric Vehicle Boom

Australian household spending rose strongly for a second month in June as consumers splashed out on electric vehicles amid high petrol prices. The Australian Bureau of Statistics reported its monthly household spending indicator (MHSI) increased by 0.8% to A$81.3 billion ($56.92 billion). This growth is significant, as analysts had generally expected an increase of only 0.2%, following a 1.2% jump in May.

The annual pace of spending growth picked up to 6% in June, reaching a three-month high. Spending for the whole June quarter rose 0.7% in real terms to A$227.8 billion. Tom Lay, ABS head of business statistics, noted that new vehicle sales were the standout within transport this month, driving a 3.0% rise.

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. The Reserve Bank of Australia has raised interest rates three times this year to 4.35% to fight inflation.