Spending levels are increasing across Australia, driven by strength in the country’s largest states, New South Wales, Victoria and Queensland.
That’s the finding of the latest Consumer Spending Behaviours Report from the National Australia Bank (NAB), which revealed spending levels nationwide grew by 3.9% in the year to June.
And, as seen in this nifty map below from the NAB, spending levels grew in most regional and urban centres with the exception of Western Australia.
To come up with that 3.9% national growth figure, the NAB analysed patterns from its customer base, looking at transactions excluding spending on mortgages, other credit repayments and government services.
“By examining around 2.7 million daily transactions, we show where spending is growing fastest and what customers are spending on,” the NAB says. “Given the size of NAB’s customer base, it provides an indication of national and regional trends.”
So it extrapolates what NAB customers spent to provide an indication of broader patterns across the economy.
Digging into to the report, the NAB found that most of increase during the June quarter came from just three states — New South Wales, Victoria and Queensland.
“Victoria, New South Wales and Queensland contributed around 98% to total customer spending growth in Q2 2017,” the NAB said, adding that Melbourne and Sydney alone accounted for just over 50% of all spending growth over the quarter.
That likely reflects stronger economic conditions, robust population growth and booming house prices in those locations over the past year, at least compared to other parts of the country.
As for the types of goods and services the NAB customer base spent their money on, the bank found that experiences, rather than tangible goods, continued to outperform.
“The report found creative services such as performing arts and music had the fastest growth at 35.3% followed by accommodation and food at 26.7%,” said the NAB.
At the other end of the spectrum, spending on education and training, construction, transport and healthcare all went backwards from a year earlier.
This chart form the NAB shows the change in spending levels by category compared to the June quarter of 2016.
According to the ABS, Australian retail prices grew by just 1% in the year to June, well below the increase in consumer price inflation (CPI) of 1.9% over the same period.
So weak inflationary pressures may go someway to explaining the lift in services spending compared to retail in the NAB data.
According to Alan Oster, chief economist at the NAB, the breakdown of spending levels indicates that consumers are increasingly seeking experiences rather than retail goods.
“Retail trade is still a key part of the spending patterns but growth is increasingly coming from consumers wanting to head out to have meaningful experiences,” he says. “We can see consumers are getting out of the house, spending their disposable income on eating out, staying at hotels and enjoying music and the performing arts.”
We’re becoming a nation of experience seekers in other words, at least based off our spending habits.
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