Australian household spending rose 1.6% in March, accelerating from modest gains of 0.3% in February and 0.2% in January, according to the Australian Bureau of Statistics (ABS).
The latest data points to a 6.3% year-on-year increase in nominal spending compared to March 2025, highlighting continued pressure on household budgets despite only gradual growth earlier in the year.
Transport costs were the primary driver of the March uplift, rising 5.1% over the month as fuel prices surged amid ongoing conflict in the Middle East. ABS head of business statistics Tom Lay said petrol prices peaked late in March, prompting households to adjust behaviour.
Motorists responded by taking smaller, more frequent trips, while experimental ABS estimates showed fuel volumes purchased fell 1.3% as consumers reacted to a 32.8% monthly jump in petrol prices. Public transport usage increased over the same period, indicating a shift in spending patterns.
Essential spending underpins sixth straight quarterly rise
Food spending also contributed to the overall increase, rising 1.7% in March. The ABS attributed this to both price inflation and precautionary stockpiling linked to global supply chain concerns.
Despite rising costs, overall household spending volumes increased 0.7% over the March quarter, marking the sixth consecutive quarterly rise. Growth was concentrated in non-discretionary categories, with health volumes up 1.5% and food volumes increasing 0.8%.
The quarterly result represents the strongest annual volume growth since mid-2023, suggesting a degree of resilience in household consumption even as cost-of-living pressures persist.
Reacting to the ABS data, Shaun Broughton, Managing Director, APAC and Japan at Shopify, said:
"Household spending in Australia climbed incrementally again in March, rising for the third consecutive month. This suggests retailers are weathering ongoing pressures, with many seeing a solid first quarter. However, elevated consumer spending will do little to soften expectations of the RBA increasing interest rates for the third consecutive month later today, with the previous two increases soon to be felt by retailers.
"Against a backdrop of regulatory pressure and the challenges of rising fuel costs, many businesses are adjusting to ongoing uncertainty. Shopify research finds 43% of Australian business owners say the ongoing cloud of macroeconomic pressures has made them perceive business setbacks or challenges as less serious, pointing to a growing level of resilience among businesses. Many retailers have been turning to technology to stay responsive, using data to track demand more closely, adjust inventory in real time, and make faster, more informed decisions as conditions shift.
"In this environment, the businesses responding well are staying close to customer demand and keeping their operations flexible. That means focusing on high-intent, practical products, managing inventory carefully and leading with value in customer communications. Using data to respond quickly to shifting spending patterns will be key to maintaining momentum as conditions continue to evolve.
"When it comes to how consumers spent their money in March, Shopify data saw strong month-on-month growth in home and utility categories, including portable water filters (+241.4%), food dehydrators (+238.1%), bread boxes and bags (+204.2%), freezers (+102.6%) and food processors (+102.02%). This suggests that while overall spending is rising, consumers are continuing to prioritise practical purchases, remaining considered in how and where they spend. Demand also increased for seasonal and outdoor products such as firewood (+223.3%), walk-behind mowers (+253.5%), chainsaw chains (+160.6%), chainsaw accessories (+133.5%) and dehumidifiers (+100.2%), pointing to households preparing for cooler months and investing in home maintenance."