DISCRETIONARY SPENDING UP FOR DEC QTR

Discretionary spending is important for hospitality businesses where the industry is the last priority for customers when they have living expenses to prioritise. In data just released by the Australian Bureau of Statistics (ABS), discretionary spending has lifted for the third straight month with a 0.4% increase in December. This follows a 0.8 per cent rise in November and a 1.0 per cent rise in October.

Robert Ewing, ABS head of business statistics, said: “Household spending on discretionary goods and services rose 0.6 per cent, which was the third straight monthly rise.

“The growth in December was driven by new vehicle purchases, dining out, air travel, and streaming services.

The data confirmed that household spending grew in all states, with the largest increases in WA (0.7%), while QLD (0.2%) experienced the smallest rise.

 

While pre-Christmas spending can explain much of the increase, when compared to last year it was notable that spending in “hotels, cafes and restaurants” was very positive, but there was a decline in “alcoholic beverages and tobacco”.  If this trend continues it will highlight a change in discretionary spending that will impact pubs and clubs.

A later media release also confirmed that living costs for pensioner households fell 0.1 per cent in the December 2024 quarter. This is the first fall in quarterly living costs since the June 2020 quarter.

Michelle Marquardt, ABS head of prices statistics, said: “Lower prices for electricity due to the 2024-25 Commonwealth Energy Bill Relief fund rebates impacted living costs this quarter. These lower electricity prices largely offset rises in other areas of living costs.”

 

Data from ABS Media releases:

Discretionary spending up for the third straight month | Australian Bureau of Statistics

Living costs fall for pensioner households | Australian Bureau of Statistics