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Australians' concerns about the cost of living have eased to their lowest point in 18 months, according to new data from the NAB Consumer Sentiment Survey Q3 2024, which polled more than 2,000 Australians.
NAB found that spending cutbacks have reduced for the first time in more than a year, with a slight decline in savings from mid-year levels.
The survey found that while cost-of-living pressures remain the primary source of consumer stress, accounting for 66.8 points in the index, these concerns have eased by 2.1 points over the past quarter, returning to levels last seen in early 2022 when interest rates started to rise.
Australians appear to be making fewer reductions in discretionary spending. The survey shows fewer respondents cutting back on dining at restaurants (53%, compared to 57% mid-year), entertainment (45%, down from 49%), and holiday plans (38%, compared to 43%).
Despite reduced cutbacks, consumers are still saving an average of $300 per month, slightly down from the $320 monthly savings recorded mid-year.
Kylie Young, NAB's personal everyday banking executive, stated that the figures suggest people are starting to regain a sense of control over their finances, with fewer individuals reporting higher prices for essential goods and services.
Young noted that after a period of intense focus on budgeting, Australians may be reaching a point where they feel more confident about their financial management.
“On average, Australians are still saving around $300 each month or more than $3,600 a year, which has helped build a buffer to weather the economic challenges. But the biggest spending cuts may be behind us,” said Young.
Young added that the easing of cutbacks could offer some relief to small businesses, which have faced challenges as households prioritised essential spending over the past two years.
“Australians are proving resilient, they’re looking for smarter ways to save and spend and, even though it’s early days, this may be an indication of a more ‘normal’ 2025,” she said.
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