Discretionary spending lower compared to last year

Household spending on discretionary goods and services was 0.6 per cent lower compared to May last year, according to figures released today by the Australian Bureau of Statistics (ABS).

Robert Ewing, ABS head of business indicators, said: “Driving the fall in discretionary spending over the year was 4.8 per cent less spending on Furnishings and household equipment, and 3.4 per cent less on Clothing and footwear.

“While overall household spending rose 3.3 per cent in May compared to the same time last year, it was the lowest growth rate since July 2021. This comes as households respond to cost-of-living pressures.”

The overall increase in household spending was driven by Hotels, cafes and restaurants (+7.8 per cent) and Transport (+7.7 per cent). These categories contributed to the 7.2 per cent rise in spending on services.

Goods spending saw a 0.9 per cent fall, which is the largest decline since July 2021. Spending on Food was the only positive contributor, rising 5.8 per cent, with the May Monthly Consumer Price Index Indicator showing a 7.9 per cent rise in food prices.

Household spending increased in all states and territories in May 2023 compared to May 2022.

Western Australia recorded the largest increase in spending (+4.7 per cent), led by rises for Transport (+13.9 per cent) and Health (+12.2 per cent).

Rises in spending growth were smaller in all states and territories this month compared to last month. Northern Territory had the smallest rise in through-the-year spending with 0.8 per cent, dropping from 1.6 per cent in April.