Goods play second fiddle to “meaningful experiences”
More Australians are splashing out on “meaningful experiences” such as concert tickets, the theatre, hotel stays and eating out rather than retail goods, according to new data released by National Australia Bank.
NAB’s Customer Spending Behaviours report, which looks at around 2.7 million daily consumer transactions, shows that in the second quarter of 2017 its customers spent 3.9 per cent more than they did the same time last year.
That was up on the two per cent year-on-year spending lift seen in the previous quarter.
And, customers in both metropolitan and regional areas were spending more.
Metro consumers on average spent $2,064 a month, up from $1,997 a month in the first quarter, while in regional areas, they spent $1,918 a month, up from $1,866 a month in the March quarter.
However, the overall rise in spending in rural areas outpaced that in the cities.
The greatest increase in spending was in arts and recreation, plus food and accommodation.
NAB chief economist Alan Oster said that much of Australians’ spending was still in retail trade, but consumers increasingly were wanting to “head out to have meaningful experiences”.
“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,” Oster said.
The data, which excludes spending on mortgages and other credit facility payments and government services, showed that spending on arts and recreational services in the June quarter jumped 35.3 per cent, on the same time last year.
That was virtually three times the first quarter’s 12 per cent year-on-year lift.
Accommodation and food services showed the second greatest spending lift in the second quarter, up 10.5 per cent on 2016, compared to the first quarter’s 7.5 per cent increase in spending on the previous year.
At the same time, households spent less on finance and insurance services, construction, and education and training.
Customer spending growth improved in all metropolitan and regional areas, bar Tasmania, with overall spending growth in rural regions continuing to outpace cities.
“Perhaps lower mortgage debt in regional areas is freeing up more disposable income for these consumers resulting in faster growth,” Mr Oster said.
In June, Australian Bureau of Statics showed that retail spending had risen for a third straight month, with spending on household goods, clothing and eating out higher, but a decline in department store sales.
Oster said he expects to see a fall in spending, amid soaring energy prices, when the ABS releases its August data on October 5.
“We had a big negative in August, so we suspect the ABS is going to report a substantial negative in retail sales,” Oster told AAP.
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