Beyond goods – a new measure broadens spending insights in Australia

The ABS is retiring its long-standing Retail Trade series, with the final release scheduled for next month. It will be replaced by the Monthly Household Spending Indicator (MHSI), providing a broader and timelier measure of household spending, especially on services. The new indicator uses de-identified bank transaction data to track individual purchases, similar to the quarterly national accounts measure. In contrast, the Retail Trade relies on business survey responses.

• The shift in household spending toward services following the COVID pandemic has reduced the relevance of goods-focused Retail Trade data. This has led to a divergence between the two data series, with the MHSI capturing a much stronger rise in household spending relative to Retail Trade. MHSI covers about 60% of Household Final Consumption Expenditure (HFCE) within the national accounts, nearly double Retail Trade’s coverage.

• The MHSI provides detailed spending for specific goods and services, while Retail Trade relies on business-reported surveys categorised by broader industry. Some components are comparable, but there are key differences in definitions and unique categories. At the state level, both series generally trend together but differ in magnitude, reflecting MHSI’s broader coverage of services.

Chart 1: MHSI surged well ahead of Retail Trade in early 2022