Finance Finance News Who to believe? New figures suggest consumers are spending like crazy

Who to believe? New figures suggest consumers are spending like crazy

NAB's spending figures give a much rosier picture than the ABS.
NAB's spending figures give a much rosier picture than the ABS. Photo: AAP
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So who do you want to believe, the Australian Bureau of Statistics or what 2.7 million actual daily transactions by NAB customers say about what Australians are doing with their money? The NAB figures say we’re spending noticeably more, the ABS says not.

The ABS, relying on surveys, reckons retail sales in the not-so-merry month of March were up just 2.6 per cent on March 2017. And each month of the March quarter was up only 0.3 per cent on the month before.

NAB’s analysis of its customers’ big data showed retail trade spending up a much more impressive 7 per cent in the March quarter on the previous corresponding period.

Either NAB’s customer base has a disproportionate share of big spenders, or there’s something amiss with the survey collection method. To further complicate the discrepancy, the NAB customer spending doesn’t quite gel with what the bank’s own monthly business conditions survey finds about retail. Are we turning into a nation of undercover shoppers?

The Q1 NAB customer spending behaviour report is on safer ground in what it says about how our total spending is allocated. The report excludes taxes, government services, mortgage or other credit payments. What’s left is as good a profile as possible of our spending trends.

And one of the most consistent trends over the past year is the growth in our buying of “arts and recreation services” – up 10.6 per cent year-on-year for Q1 after the December quarter had jumped 17.2 per cent year-on-year. It looks like we Australians love a show and sports events.

As the NAB economics team comments, “experiences” continue to the led the way on spending. Aside from arts and recreation, “accommodation and food services” spending grew by 12.7 per cent.

I’ve written before in another place about our steady proportional drift away from buying things to buying experiences.

That’s in keeping with the broad expectation that, as a nation becomes richer, it has more money available for services and experiences, while there are only so many things you can fit into any one wardrobe. Or garage.

What’s also interesting about the latest NAB report is what real-world spending says about one of our most common complaints: the allegedly ‘skyrocketing’ cost of utilities. Year-on-year, NAB customers’ spent only 3.2 per cent more on electricity, gas, water and waste.

For fellow sufferers of statistical fascination, there’s also a breakdown of state, metropolitan and regional spending differences.

Residents of Sydney and Melbourne are the nation’s big spenders, Sydneysiders forking out an average of $2197 a month on the report’s covered industries with Melburnians just a dollar behind. Hobart was the capital with the tightest citizens – $1993 a month.

The differences were much greater when comparing the growth rates of spending in local government areas (LGAs). It looks like NAB customers living in Sydney’s Hunters Hill council area had both Lotto and Powerball wins – their spending jumped by 19 per cent. Sydney had seven of the top 10 metropolitan LGAs for spending growth.

Those fastest growing regional LGAs made the city slickers look parsimonious. Spending in NSW’s Snowy Monaro soared 36.7 per cent – it looks like Snowy 2.0 is already flowing through wallets and purses of the high country.

The moral of the story: the place to have a shop in the March quarter was Cooma, specialising in NAB customers.

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