Cost of living and how it affects shoppers is the hot topic this month, according to the National Australia Bank (NAB)’s quarterly NAB Consumer Sentiment Survey, which draws on responses from 2000 Australians.
With everything from job security to inflation affecting the way households are budgeting, it’s no surprise that most Aussies are looking to dial down their spending. But it’s not all bad news.
Consumers are still finding money for entertainment, self-care and special occasions – just in less extravagant patterns. Even business confidence is up, according to NAB’s data.
Here’s the five core insights NAB’s survey unveiled…
Consumers are tweaking their spending behaviour, with many looking to save an extra $300 each month by cutting back in a few areas. Consumers are especially leaning towards businesses who offer discounts and savings to their bottom line.
Additionally, 80% of consumers view price as the most important factor in purchases, while four in 10 are adding to their savings as a priority, and one fifth are channelling their money into paying off debt or mortgages.
Those in the over-65 bracket are making relatively few adjustments to their spending, and cite quality service and reputation as top priorities for where they spend.
Gen Z (18-29) are the ones making the biggest changes to their spending habits, and interestingly, look to social media influencers for product discovery and endorsements.
While 60% of households have cut back spending on dining out, when it comes to family, there’s far less compromise. Just 14% have reduced spending on their children’s activities, and only 23% on pets. Health and wellness have also held steady in budgeting, with only 23% of Aussies cutting back on private insurance, gyms, and sports clubs.
Per NAB’s economic data analysts, the cash rate is likely to remain stable at 4.35% to May 2025. Beyond that, the team forecasts a drop to 3.6% by December 2025, falling even further in 2026.
Moving up six points into positive territory, business confidence is back on its feet, according to the survey. Driven by a broad-base increase across industries, NAB’s monthly survey now puts business confidence at +4 – the highest it’s been since early 2023 – despite an overall decline in business conditions.
Capacity utilisation has also climbed to 83.5%, well above average.
