Australian tobacco consumption has been tumbling, but we still love a drink. That’s one of the broad themes highlighted by a closer look at the household consumption component of Q4 GDP results released yesterday.
We looked at the changes in consumption patterns across five consumer staples over three decades from 1986 to 2016. The figures should be viewed in connection with population statistics, with the nation’s residents increasing by 50% over that period, from 16.1 million in 1986 to 24.1 million last year.
As the population grows, so naturally will the nation’s overall spend on life’s essentials. But the ebbs and flows of consumer spending are revealing nonetheless.
Cigarettes and tobacco: Aussies are giving up the durries. The chart shows a steady downward trend in seasonally adjusted cigarette & tobacco consumption over the last 30 years. After a pronounced downward shift in the early 1990’s, steady decreases have continued to the present day. We now collectively consume just a third of the cigarettes & tobacco we did 30 years ago.
This chart points out the key anti-smoking measures introduced since the early 1970’s. The steep reduction in the early 1990’s could be connected to the ban of point-of-sale advertising in 1991, which followed the implementation of multiple advertising restrictions throughout the 1980’s.
Alcohol: Aussies are fond of a drink, with consumption on a steady upswing, and doesn’t look to be slowing down. From a range of $1.8 to $2 billion between 1986 and 1992, the amount Australians spend on alcohol has steadily risen to a record high of $4.037 billion, in seasonally adjusted terms (taking into account inflation) in the most recent quarter. Remember that’s a more than 100% increase over the last 30 years, but our population has only increased by 50% over the same time frame. The ABS has said we’re at 50-year lows in terms of overall consumption, so a push to quality over quantity may explain that spend as wine (and champagne addiction) and boutique beers replaced VB and XXXX.
And while there was a brief sobering up around the GFC, we’re back at record levels, passing the $4 billion mark (that calls for a drink to celebrate!) in the September 2016 quarter.
Food: Historical data on food consumption shows a very linear trend. The result is that in chain volume seasonally-adjusted terms (more on that from the ABS here), Australians now spend about twice as much on food as they did 30 years ago.
Electricity, gas and other fuel: Yes, the cost of power is a major political debate right now, but here’s the interesting bit: after steadily increasing, seasonally-adjusted electricity & gas costs reached a peak of $6.187 billion in December 2010 before reversing. Consumer purchases in this sector hit a recent low of $5.531 billion in June 2014 (just before Tony Abbott repealed the carbon tax, which came into effect the following quarter) before getting back on an upward trajectory. Costs of $6.140 billion in the 2016 December quarter were the highest in six years.
Purchase of vehicles: Seasonally adjusted vehicle purchases have increased from just over $1 billion per quarter in 1986 to around $4.5 billion. Chain volume dollar spend in 2016 ($18.088 billion) was about about $1.2 billion dollars below 2015 figures ($19.251 billion). This may be reflective of a recent volume trend in car purchasing behaviour by Australian consumers, with a significant decrease in the purchase of passenger vehicles offset by higher demand in the SUV market.