Australian population growth masking weaker consumption trends

Household consumption growth has slowed markedly in recent quarters as tighter policy settings have started to weigh on growth. Growth has stayed in positive territory largely due to strong population growth; on a per capita basis, the trend is much weaker, with consumption declining for the last three quarters.

Looking ahead, we think the decline in consumption per capita is near its trough. We forecast per capita consumption to track sideways over the next year. The recovery in real incomes along with cash rate cuts will facilitate a rebound in spending in 2025.

Watch Ben Udy’s full interview with ABC’s The Business below: