Consumer Household Spending in Australia: A Current Overview As Of November 2023

Australia's household spending trends present a complex and evolving picture, reflective of broader economic changes and consumer behavior adjustments. Here's an insight into the current state of consumer household spending in Australia, particularly focusing on the household goods and appliances sector.

Overall Spending Trends

1. Yearly Increase in Household Spending: Throughout the year, there has been a 4.9% increase in household spending on a calendar-adjusted basis. This increase, however, is not uniform across all sectors. Spending on services has seen a notable rise of 9.6%, while expenditure on goods has slightly decreased by 0.1%​​.(Source)

2. Discretionary and Non-Discretionary Spending: Both non-discretionary (essential items) and discretionary (non-essential items) spending have increased, by 9.2% and 0.3% respectively. This indicates a cautious but steady consumer spending pattern, balancing between necessities and luxuries​​. (Source)

Household Goods and Appliance Spending

1. Decline in Household Goods Retailing: The household goods sector, particularly important in the context of appliances, has experienced a decline. Retail sales volumes for household goods retailing fell by 3.7%, marking the fifth consecutive fall in this sector. This suggests a cautious approach by consumers towards spending on household items and appliances​​. (Source)

2. Forecast of Weakening Spending: Looking ahead, there is an expectation that household spending might weaken further over the remainder of 2023 and into 2024. This projection is based on comprehensive data, including the Household Spending Insights (HSI) index, which analyses spending across 12 categories​​. (Source)

Economic Influences and Consumer Behavior

1. Cost of Living Concerns: The cost of living remains a significant concern for Australians, influenced by recent federal budgets and interest rate hikes. These economic factors have contributed to a reduction in retail sales volumes, which fell by 0.6% in March 2023, following a 0.3% fall in December 2022​​. (Source)

2. Warning Signs in the Economy: Despite household spending supporting the Australian economy, there are warning signs of a possible severe downturn. Business confidence is decreasing, and consumer confidence is at sustained lows not seen since the 1990s recession. This atmosphere of economic uncertainty is likely influencing consumer spending habits, including those related to household appliances and goods​​. (Source)

Conclusion

In summary, while overall household spending in Australia has increased in 2023, there is a clear trend towards more cautious spending, particularly in the household goods and appliances sector. Economic factors such as the cost of living and interest rate hikes, coupled with concerns over consumer and business confidence, are shaping how Australian households allocate their spending. As we move towards 2024, it is expected that this cautious approach will continue, reflecting the broader economic uncertainties and the evolving consumer landscape in Australia.