Below trend growth to continue
Total NAB customer spending grew 6.8% y/y in Q1 2018, up from 5.0% in the previous quarter and 2.0% compared to the same quarter a year ago.
Spending growth in metropolitan areas is now outpacing growth in regional areas – the first time since NAB started reporting this data in Q4 2016. Spending growth was again fastest for ‘experiences’ such as Accommodation & Food and Arts & Recreation. By capital city metro area, spending growth was fastest in Melbourne, Sydney, Hobart and Adelaide. In regional areas, spending growth was fastest in SA, followed by VIC, QLD and NSW. Average monthly spending was highest in Sydney ($2,197) marginally ahead of VIC ($2,196). But, there are big variations in average spending amounts across metropolitan local government areas (LGAs). In Sydney for example, average monthly spending ranged from $4,166 in the highest spending LGA to just $1,475 in the lowest – a gap of $2,691.
What does this report measure? It explores the spending patterns of our customers. By examining around 2.7 million daily transactions, it shows where spending is growing fastest and what customers are spending on. Given the size of NAB’s customer base, it provides an indication of national and regional trends.
Is spending growing? Total NAB customer spending grew by 6.8% y/y in Q1 2018 (up from 5.0% in Q4 2018 and 2.0% in Q1 2017). Spending in metropolitan areas increased by 6.9% (4.9% in Q4 2017 & 1.6% in Q1 2017), marginally ahead of a 6.6% increase in regional areas (5.2% in Q4 2017 & 3.2% in Q1 2017). This is the first time that spending growth in metropolitan areas has outpaced growth in regional areas since NAB first started compiling this data in Q4 2016.
Where is spending growing fastest in capital city areas? Spending grew in all capital city metropolitan areas in Q1 2018 and the rate of growth was stronger than in the previous quarter and at the same time one year earlier in all cities, except Darwin. Growth was led by Melbourne (7.8%) and Sydney (7.5%), with Darwin (3.4%) and Perth (5.3%) slowest.
What about in regional areas? Spending growth accelerated in all regional areas relative to the previous quarter and the same period last year, except in regional NT. Spending growth was fastest in SA (9.5%), VIC (6.8%) and NSW (6.5%). It was slowest in TAS (4.5%), WA (5.6%) and the NT (5.6%).
How much are we spending? Average monthly spending in metro areas was $2,150 in Q1 2018, down from $2,306 in Q4 2017 (Christmas impact), but up from $1,997 in Q1 2017. In regional areas, it was $1,947, down from $2,089 in Q4 2017, but up from $1,866 in Q1 2017. WA is the only state where spending is higher in regional ($2,117) than metro ($2,098) areas.
Who’s spending the most in metro areas? Sydney ($2,197) and Melbourne ($2,196) led the way. But there were big differences in spending by metro LGAs. In Sydney, average monthly spending ranged from $4,166 in the highest spending LGA to $1,475 in the lowest – a gap of $2,691. The gap between the highest and lowest LGAs was lowest in Darwin ($495).
What about in regional areas? Average monthly customer spending was highest in WA ($2,117) and QLD ($1,974). But the gap between the highest and lowest spending LGAs was less extreme – ranging from $1,261 in QLD to $624 in WA.
In what category did spending grow fastest? ‘Experiences’ continued to lead the way with Accommodation & Food Services growing 12.7% and Arts & Recreation Services up 10.6% in Q1 2018. Encouragingly, NAB’s data also highlighted a further acceleration in Retail Trade spending (7.0%), with spending on Retail Trade growing in all states. Moreover, NAB customer spending grew in 13 of 15 spending categories in Q1 2018.
For further details, please see the attached document:
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