Households Experience 4.8% Surge in Spending, with Transport Costs Skyrocketing

In a recent report from the Australian Bureau of Statistics (ABS), it was revealed that household spending in August 2023 was 4.8% higher compared to the same period last year. This increase was primarily driven by a substantial surge in spending on transportation, which witnessed a remarkable 17.1% rise over the year. This growth rate significantly outpaced the 10.9% increase observed in the 12 months

leading up to July.

Source: Australian Bureau of Statistics, Households spend more on transport in August 5/10/2023

Contributing Factors

The surge in transport spending can be attributed to various factors. Firstly, higher petrol prices, as indicated in the August Monthly Consumer Price Index Indicator, played a significant role. Additionally, expenditures related to holiday travel and public transportation contributed to the overall increase in transport costs.

Other Major Contributors

Apart from transport, the rise in household spending was influenced by increased expenditures in Health (+8.0%), Hotels, cafes, and restaurants (+6.9%), and Food (+4.4%).

Regional Variation

Household spending witnessed growth across all states and territories in August 2023 compared to the same period in 2022. Western Australia led the way with the largest increase in spending (+9.9%), primarily driven by soaring expenditures on transport (+22.5%) and health (+15.4%).

Monthly Variations

Comparing spending between August 2023 and July of the same year, growth rates were higher in all states and territories, except Tasmania and the Australian Capital Territory. The Northern Territory experienced the most significant surge in its growth rate, rising from +0.4% in July to +4.8% in August.

Data Sources and Considerations

The ABS compiles this indicator using aggregated and de-identified card and bank transactions from various financial institutions. It covers nine of the 13 key divisions classified under the Classification of Individual Consumption by Purpose (COICOP). The data is reported in both current price original and current price calendar-adjusted terms.

Conclusion

Household spending trends in August 2023 indicate a notable increase, primarily driven by surging transportation costs. The data reflects a dynamic economic landscape, and consumers are navigating these changes with varying spending patterns across different regions and sectors.

Customer Notice:

Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.

Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com