Travel drives increase in household spending: Australia

Household spending rose 11.2 per cent in December 2022, compared to the same time last year, according to figures released today by the Australian Bureau of Statistics (ABS).

Robert Ewing, head of business indicators at the ABS, said: “the growth rate in total household spending continued to ease in comparison to previous months, after peaking at 29.2 per cent in August.

“In December, all spending categories recorded through-the-year increases, with services showing more strength than goods.

“Household spending on services rose 22.7 per cent compared to December 2021, driven by increased spending on transport (up 31.0 per cent), as air travel demand continued to grow strongly,” Mr Ewing said.

Strong growth was also seen in hotels, cafes and restaurants (21.8 per cent) and miscellaneous goods and services (12.6 per cent).

In contrast, spending on goods recorded a more moderate rise of 2.7 per cent through-the-year.

Through-the-year, discretionary (+8.1 per cent) and non-discretionary (+14.8 per cent) spending rose in December, after these categories peaked at similar levels in August (+28.1 per cent and +30.2 per cent respectively).

In December, the increase in discretionary spending was driven by recreation and culture, while transport made the strongest contribution to the rise in non-discretionary spending.

All states and territories saw increased household spending in December 2022 compared to December 2021.

Victoria recorded the largest increase in spending (up 13.9 per cent), with strong growth in transport (37.7 percent) and hotels, cafes and restaurants (21.1 per cent). Compared to November 2022, the through-the-year rises in December were lower in all states and territories except Victoria and the Australian Capital Territory.