Denmark: Goods resilience offsets weaker services – Danske Bank

Danske Research Team reports that overall consumer spending excluding energy in June was broadly unchanged on the month, with real spending up 4.3% year-on-year. Real retail spending on goods rose, particularly in larger consumer categories, while service spending generally declined. The report highlights reduced real fuel consumption as households respond to higher prices and a shift toward electric cars.

Goods strength contrasts weaker services

"Adjusting for seasonality and prices, total spending excluding energy was broadly unchanged in June, increasing 0.1% compared to May. However, compared to the same month last year, real spending was 4.3% higher. Unlike the broad-based growth seen in May, June was characterised by higher goods spending, while service spending declined across most categories."

"Real retail spending rose 0.7% m/m in June after seasonal and price adjustments, supported by higher spending across all goods categories. Real spending on smaller consumer goods continued to increase modestly, while spending in larger consumer goods categories, such as DIY stores, furniture stores and electronics and household appliance stores, rose significantly. Grocery spending was essentially unchanged in both nominal and real terms following strong growth in May."

"Nominal spending at petrol stations declined 5.0% m/m in June, partly reflecting lower fuel prices from May to June. However, fuel prices remain significantly elevated compared to February, before the conflict in the Middle East. Adjusted for prices, real spending fell 1.6% m/m in June and has declined 4.8% since February."

"Households are buying less fuel in response to higher prices, partly reflecting a declining number of petrol and diesel cars and a significant increase in the stock of electric cars."

"Service spending generally declined in June. While spending in hotels increased in nominal terms, only beauty salons and barbers saw an increase in real spending. Bars and nightclubs, restaurants and most other service categories saw lower real spending, with spending on tourist attractions and amusement parks falling particularly sharply."