Consumers are increasingly spending more on services than goods, with discretionary services "going backward", according to economist David Robertson.
Robertson, Bendigo and Adelaide Bank's chief economist and head of economic and markets research, said that despite huge aberrations during the pandemic, what's being observed currently is far less spending on goods and not just more on services but on non discretionary services.
"Non discretionary services are things like insurance, healthcare, logistics, professional services - that's going through a real period of growth and moreover, it's taking a bigger share of household spending," Robertson said on stage at AdNews Adelaide L!VE.
Data recently released by Melbourne-based Bigdatr showed that the financial sector is currently leading the pack in advertising volumes in Australia as Commonwealth Bank, Medibank, Telstra, American Express, Bupa, Optus and Westpac all took out spaces in the top 10.
"Now, spending overall is actually higher if we look at retail sales than where we were pre-pandemic, but that's not because we're buying more in volume. It's just because.thing cost more," Robertson said.
Insights consultancy Nature predicted that more than 10 million Australians would reach for their credit cards and wallets on last year's Black Friday sales, up 14% the year prior. In 2022, Australians spent $7.1 billion across the shopping event.
Robertson also said that those who will be spending the most, according to his consumer spending predictions, will in fact be those that own their houses outright and who are thus less impacted by where interest rates are.
"Finally, while household spending is also going backwards at the moment, net migration and the impact of international students and international tourism is actually compensating for that fall in household demand, so that's clearly going to be a source of spending that is going to be much higher than domestic demand too," he said.
Among Robertson's economic predictions for 2024, rate cuts, a decelerated Chinese economy and a volatility in global markets were among the top 10 that he shared (pictured below) with the AdNews Adelaide L!VE audience.
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