-- Australian consumer spending rose 2.1% in March, month-on-month, driven by a sharp increase in fuel spending due to higher prices, according to NAB's consumer spend trend report published on Wednesday.
Consumer spending rose 8.4% compared with the same month last year.
Excluding fuel, spending rose 0.7% month on month and 7.5% on a yearly basis, supported by higher food spending and rising construction and service costs.
"Consumer spending rose 2.1% in March, driven by a sharp 33.5% increase in fuel spending following the fuel price surge," said NAB Chief Economist Sally Auld.
Fuel spending was up 34% in March and 25.7% higher over the year, with price growth outpacing spend per transaction in March, pointing to precautionary purchases and smaller refuelling top‑ups as prices rose, the report added.
Goods spending rose 3.7%, and services spending rose 0.4% in the month, led by utilities & telecoms.
Consumers began to scale back on discretionary services in March as spending shifted toward non‑discretionary items, led by fuel, while categories such as cafes and restaurants, hotels, and travel declined.
Consumer spending grew across all states and territories in March, with South Australia and Queensland seeing the strongest growth, while over the past year, spending growth nationally has been driven primarily by essential categories, particularly utilities and fuel.
"For now, consumers have absorbed higher fuel expenses with only a small impact on their broader spending. However, there is clear underperformance among discretionary categories, particularly hospitality, travel, and personal services," Auld said.
"We expect renewed cost-of-living pressures to continue to place ongoing pressure on household budgets and weigh on discretionary purchases," Auld added.