Spending on the rise in 2023
It’s been another busy year for local businesses.
Through our programs and our regular conversations with business leaders in the City of Melton, we’ve heard of many of many businesses that had to problem solve and overcome new challenges in 2023.
We’ve also heard of, and reported on, many stories of new successful endeavours, expansion and sustainable growth during this time and we look forward to this trend continuing as more investors choose the City of Melton to start and grow their business.
Let’s look at some key expenditure types and indicators to see what the changes in overall spending were between 2022 and 2023.
All data in this document has been compiled with data from Spendmapp by Geografia. Spendmapp cleans and analyses bank transaction data by time, geography, expenditure category and type allowing continuous monitoring and analysis of local economic activity.
The table above shows increases in spending across all expenditure categories, as expected for a growing city and during a time of high inflation, but let’s take a closer look.
When looking at the growth for each metric and comparing their respective growth rates, we can see that Online Spending remains at a very high level, but also that its growth rate has slowed down. The change from $1.865b to $1.916b represents an increase of 2.7%, this is a significantly lower growth rate than the changes seen in other expenditure categories.
The slow-down in online spending growth is a positive sign for smaller bricks and mortar retailers and professional service providers that have not established any online presence or sophisticated their current digital footprint. As the overall online spending volume remains high it still provides a compelling argument for businesses, that are not selling online yet, to benefit from a trend that is here to stay.
Do you need to up your online game?
Then be sure to read our article on Confidence on Camera and visit the Australian Small Business and Family Enterprise Ombudsman website for guidance on Digital Marketing Best Practice if your business needs support with its digital presence.
Spending timeseries, TLS-RES-ROS, City of Melton (Spendmapp by Geografia)
Total Local Spend (TLS) has been trending up, at a moderate growth rate throughout most of the year, climbing by $230m to a total of $2.477b for the 2023 calendar year. This represents a 10.2% increase.
The growth in TLS has been achieved mainly from strong contributions in visitor spending, resulting in Visitor Local Spending (VLS) increased its share of TLS from 32.7% to now 33.8%. More on this at the end of this article.
It is important to note that Visitor Local Spend includes not just the traditional “visitor economy” but any demand, both from non-resident consumers and external businesses, that is met by a local business or supplier.
Resident Escape Spend (RES) grew from $2.28b to $2.48b (+ 7.4%) and remains at a high level.
Ongoing local jobs growth and a more diverse shopping, entertainment and service offering will be the main drivers to buffer increases in escape spending in the long-term.
As an example, the top 3 external suburbs, that contribute the most to the City of Melton’s escape spend, represent two suburbs with a major shopping destination (Taylors Lakes and Maribyrnong) and the City of Melbourne. The latter being not only an entertainment hub, but also a key employment destination which, according to census, data attracts a high percentage of the City of Melton’s residents that have high skilled, white-collar jobs that are currently under-represented in our city. For more information on the City of Melton’s jobs-to-worker ratios visit Jobs to workers ratio | Melton | economy.id.
The City of Melton has a range of strategies that are designed to increase employment self-sufficiency which will result not just in shorter commutes for residents, less accidents and less pressure on roads, but also trigger a decrease in commuting associated escape spending.
This can be illustrated when looking at relevant suburb level data during work hours.
After filtering RES to the City of Melbourne as the sole RES destination suburb, we can see that from February 2023 until January 2024 a total of the $119m escaped to the City of Melbourne.
A further comparison of work-hours with non work-hours spending showed that $54.9m of destination RES was spent during work hours alone.
RES, Timeseries, City of Melton – Melbourne, work hours only
The corresponding timeseries shows a relatively even distribution throughout the year with small dips in spending during school holidays and an end of year festive season peak. This may be explained by working parents choosing to take time off, or work from home during school holidays and visiting the city centre more frequently and for special occasions during the month of December.
During work hours, Dining and Entertainment expenditure ranked #1 amongst the top five RES expenditure categories and combined with the next four categories accounted for ~85% of all spending, by City of Melton wallet holders, in the City of Melbourne.
RES, Top 5, 02/2023-01/2024, City of Melton to Melbourne, work-hours only
Strategies towards higher employment self-sufficiency
To understand what opportunities and land use strategies Melton City Council has identified to increase the ratio of local jobs per member of the (corresponding) industry workforce, please read our MEILS (Melton Employment & Industrial Land Strategy) article and have your say on the document by heading to the Melton Conversations page.
If you would like to see what progress has already been achieved between the last two census cycles, when it comes to our city’s journey in closing the jobs gap, please visit our public .id (informed decisions) pages.
Finaly, if your business is already based in the City of Melton and you are interested in establishing or improving your own “Employ Local” strategy, please contact our team to discuss how we can support you and please create an employer account on Melton Jobs Hub.
Visitor Local Spend: The winner of 2023
As a key takeaway for 2023, it is important and encouraging to note that the rapid growth in VLS means, that more and more local businesses are attracting non-resident consumers and/or exporting their products and skills to meet external demand.
We are confident that the positive trend and growth in VLS will continue to develop in 2024 and we are curious to see how other expenditure types will be trending.
The fast rate of commercial and industrial development, underpinned by the City of Melton’s ongoing population growth, is guaranteed to increase local expenditure opportunities for consumers. At the same time, the increase in business diversity and choice, will also create a more compelling argument for visitation into our municipality, both for leisure and business purposes and for the benefit of new and existing businesses.
Ms Peacock Restaurant, Eynesbury: Winner MBEA 2023, Visitation & Hospitality
If you own a business or work for one that has a positive story to tell, we encourage you to get in touch with us as we are always on the look out for local heroes that would like to share their story.
Participating in our Melton Business Excellence Awards (MBEA) is another great way of inspiring fellow or future business leaders and investors and receive recognition for what your team has accomplished. Be sure to follow our newsletter so you don’t miss out on relevant dates for this program.
VLS, 2022-2023 across expenditure categories (Spendmapp by Geografia)
The timeseries above and the summary data table below show that a diverse range of business sectors accounted for the increase in VLS. The Dining & Entertainment category showed a particularly strong performance over the last six months of the year ranking second in overall expenditure, just behind the grocery and supermarket segment.
As always, we encourage you to get in touch with us if you would like to spend some time with a member of our team to crunch the data for your suburb, your industry, or if you need general guidance or referrals to key stakeholders (developers, real estate) to make future investment decisions.
The City of Melton is open for business and ready to welcome new investors that would like to be a part of and add to our city’s economic growth and success.