Household spending growth slows in March: Australia

Household spending rose 8.2 per cent in March compared to the same time last year, according to figures released today by the Australian Bureau of Statistics (ABS).

Robert Ewing, ABS head of business indicators, said through the year growth in household spending eased across all spending categories in March.

“Spending on discretionary goods and services rose 2.2 per cent, down from the recent peak in growth of 28.3 per cent in August 2022.

“Non-discretionary spending growth has also slowed, but to a lesser extent. In March, spending on non-discretionary goods and services increased 13.9 per cent, after peaking at 29.9 per cent in August,” Mr Ewing said.

The overall increase in household spending was driven by Hotels, cafes and restaurants (+22.8 per cent) and Transport (+16.0 per cent).

Spending on goods rose 4.8 per cent, boosted by a 12.6 per cent increase in Food, while spending on services saw an 11.4 per cent rise.

“Rising prices are contributing to this growth. The March quarter Consumer Price Index showed services price inflation rose 6.1 per cent – its largest rise since 2001 – and goods price inflation rose 7.6 per cent,” Mr Ewing said.

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

The Australian Capital Territory (ACT) recorded the largest increase in spending (+12.6 per cent), with large growth also seen in Food (+18.2 per cent) and Hotels, cafes and restaurants (+17.3 per cent).

The through-the-year rises were lower in all states and territories this month compared with last month. Queensland had the smallest rise in through-the-year spending with 7.0 per cent, dropping from 12.7 per cent in February.