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Consumers opt for experiences over goods

Business

Consumers are spending more on concerts and going to the movies but staying away from the shops, particularly clothing stores, a new survey of spending shows.

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Economy-wide spending in October recorded its strongest growth in five months, according to the Commonwealth Bank’s Business Sales Indicator, but the increase wasn’t across all sectors.

Concert, cinema and sporting event experiences were hot ticket items, along with weekends away and hotel bookings as the amusement and entertainment category recorded the strongest growth in the survey – up 1.8 per cent in the month.

Spending in clothing and retail stores dropped slightly – the first fall in eight months.

CommSec chief economist Craig James said the result shows Australians are happy to spend but they’re choosing experiences over tangible goods.

“It may be the case that people nowadays have got enough clothes and shoes and TVs,” he said.

James said despite the 0.1 per cent fall in spending across the retail and clothing stores sectors the result is a good news story.

“Retail trade is only about 30 per cent of household spending and then on top of that you’ve got a business sector that is doing well at the moment and spending money, and the government sector which is spending money,” James said.

“The drop in retail and clothing sales may just be a pause before consumers lift spending in the lead-up to Christmas”.

The Business Sales Indicator rose 0.6 per cent in trend terms in October, above last month’s average monthly rate of 0.5 per cent and the long-term trend rate of 0.4 per cent, making for 33 months of increased spending in the national economy.

The BSI measures the value of credit and debit card transactions processed through the bank’s merchant facilities.

WHERE THE BIGGEST SPENDERS ARE – STATE BY STATE

* NSW, Queensland and the Northern Territory lead the way with a 0.7 per cent increase in spending

* South Australia and Victoria were not far behind on 0.6 per cent

* Western Australia followed with 0.5 per cent

* ACT increased by 0.4 per cent

* Tasmania had the lowest growth with just 0.2 per cent

– AAP

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