The holiday season is often associated with joy and cheer, but it can also bring a significant increase in household spending.
In fact, according to the latest data from ABS, household spending rose 17.8 per cent in January compared to the same time last year.
Robert Ewing, ABS head of business indicators, said:
“Household spending remained high to start the new year, with increases across eight of the nine spending categories compared to January 2022.
“These increases were led by spending on transport (up 41.5 per cent), hotels, cafes and restaurants (38.5 per cent) and clothing and footwear (20.9 per cent).
Spending on services recorded a 28.2 per cent through-the-year increase in January 2023, which was stronger than the 8.6 per cent rise in goods spending.
This can be credited to the post-COVID recovery in spending categories such as transport, hotels, cafes and restaurants and recreation and culture.
Spending on these services was more affected by COVID restrictions, and 2022 has seen a recovery to a more normal share of total spending.
From the low point in April 2020, spending on services has risen 145.5 per cent compared to 35.8 per cent for goods."
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Analysis reveals significant shifts in household spending habits since pre-pandemic times
Compared to January 2020 pre-pandemic data, spending on goods has risen by 23.7% while spending on services has increased by 13.8%.
The highest percentage rises in spending categories were observed in clothing and footwear (+32.2%) and recreation and culture (+25.2%), potentially due to price increases.
While strong spending on services played a role, the overall increase in household spending for the year ending January 2023 was primarily due to improved trading conditions compared to January 2022, when COVID-19 Omicron restrictions were in place.
State and territory results
In January 2023, household spending showed an increase in all states and territories, compared to January 2022.
The Australian Capital Territory reported the highest growth in spending (+20.5%), with significant increases observed in hotels, cafes, and restaurants (+39.4%) and transport (+35.3%).
Moreover, through-the-year rises in household spending were higher in all states and territories in January 2023, compared to December 2022.
Tasmania recorded the largest percentage point increase in through-the-year spending, rising from 9.2% in December to 17.9% in January.
Source of charts and commentary: ABS
