Insights into household consumption, September quarter 2020

Released
2/12/2020

Household consumption increased 7.9% in the September quarter, the largest rise in the 60 year history of the national accounts, reflecting a partial recovery from the unprecedented 12.5% fall in the June quarter. The quarterly rise reflects increased spending with easing of COVID-19 restrictions. Consumption nevertheless remained weak through the year, down 6.5%.

Household spending on services increased 9.8%, driven by discretionary services, and led the partial recovery in overall household spending. Goods consumption increased 5.2%, with strong demand across all the broad categories.

Most jurisdictions eased COVID-19 restrictions on households and businesses throughout the September quarter.

Household spending in the quarter was driven by partial recovery in spending on hotels, cafes and restaurants, recreation and culture and transport. Household spending remained weak through the year, reflecting reduced holiday travel due to international and domestic border closures, as well as the Victorian lockdown. Household expenditure on health categories recovered in the September quarter, up 26.0% as visits to health providers increased and elective surgeries resumed.

Household consumption on goods increased 5.2% in the September quarter and strengthened through the year to 3.5%. Demand for imported goods such as household appliances, audio visual equipment and furniture remained elevated. Global supply and logistics disruptions earlier this year resulted in slowing of imported consumption goods which rebounded in the September quarter.

The recovery in these areas of household spending is consistent with the findings from the Household Impacts of COVID-19 Survey – Returning to activities.

Household consumption by state & territory

While the Commonwealth government introduced uniform national restrictions, such as international border closures, the state and territory governments managed restrictions in their jurisdictions. This resulted in different household consumption patterns across the states, most notably Victoria.

With most states and territories easing restrictions in the September quarter, household consumption increased in all states and territories, except Victoria. Household consumption in Australia excluding Victoria grew 11.0%, but was down 3.1% through the year. Victoria’s second wave of COVID-19 cases and consequent introduction of strict containment measures saw household consumption fall 1.2%, following the 14.0% fall in the June quarter, to be down 16.0% through the year.

See the spotlight article State economies and the stringency of COVID-19 containment measures for further insights.