Resident households spending rose, on higher quality and more expensive goods, services

SINGAPORE - Households at all income levels expenditure rose 4.4 per cent a year on average over the five year period between 2008 and 2013.

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 The following is the press statement from Singapore's Department of Statistics:

Average Monthly Household Expenditure and Income Increased, With Income Growth Outpacing Expenditure Growth

In 2012/13, Singapore resident households spent an average of $4,720 a month on goods and services, higher than the $3,810 in 2007/08. Average monthly household income from all sources also rose, from $8,110 in 2007/08 to $10,500 in 2012/13.

On both an overall and per household member basis, household income rose faster than household expenditure over this period.

These are the key findings from the Singapore Department of Statistics' Household Expenditure Survey (HES) which was conducted from October 2012 to September 2013.

The report on "Report on the Household Expenditure Survey 2012/13" is available online on the Department's website at https://www.singstat.gov.sg.

Household Income from All Sources Rose for All Income Groups, with the Lowest Quintile Experiencing the Fastest Growth

Average monthly household income from all sources rose by 5.3 per cent per annum in nominal terms between 2007/08 and 2012/13.

Households across all income groups experienced income growth over this period.

Those in the lowest to middle income quintiles saw their income increase by 6.1 to 6.6 per cent per annum, faster than the income growth of households in the top two quintiles.

Notably, households in the lowest 20% also experienced significantly faster income growth between 2007/08 and 2012/13 than in the earlier 5-year period from 2002/03 to 2007/08.

Across house types, households living in HDB flats experienced higher annual income growth (5.2 per cent) between 2007/08 and 2012/13, compared to those in condominiums and other apartments (3.6 per cent) and landed properties (4.2 per cent).

Employment income accounted for 79 per cent of total household income from all sources in 2012/13, with business income and income from non-work sources 1 contributing 11 per cent and 10 per cent respectively.

Household Expenditure Increased More Slowly than Income

Compared to the increase in average household income between 2007/08 and 2012/13, average household expenditure rose by a lower 4.4 per cent per annum.

Similarly, on a per household member basis, average household expenditure increased more slowly than income, by 4.6 per cent and 6.2 per cent respectively.

Between 2007/08 and 2012/13, households across all income groups experienced increases in their average monthly household expenditure. Households in the middle income quintile (i.e., 41st - 60th percentile) experienced the fastest increase in average expenditure compared to other income groups, at 5.5 per cent per annum.

In comparison, average monthly expenditure of households in the lowest 20% and 21st - 40th percentile income groups grew more slowly, at 4.5 per cent per annum and 3.7 per cent per annum respectively.

For all income groups, growth in average household income outpaced growth in average household expenditure from 2007/08 to 2012/13, as well as in the earlier 5-year period from 2002/03 to 2007/08.

While households spent more in 2012/13, the increase in monthly household expenditure was partly due to households consuming better quality and higher-end products and services.

Increases in Household Expenditure Partly Reflect Lifestyle Changes and Spending on Better Quality Products and Services

In 2012/13, housing, food and transport accounted for the largest shares of household expenditure for all income groups. Collectively, they contributed to 65 per cent of monthly household expenditure on average, up from 64 per cent in 2007/08 and 61 per cent in 2002/03.

While expenditure in all three categories increased between 2007/08 and 2012/13 and over the longer 10-year period, the increase in spending partially reflects lifestyle changes and consumption of higher quality products and services.

For instance, with the increasing tendency for households to dine out, food serving services accounted for 64 per cent of the expenditure on food, up from 62 per cent in 2007/08 and 58 per cent in 2002/03.

While meals at hawker centres, and food courts continued to constitute the bulk of the expenditure within food serving services, the share of spending in restaurants, cafes and pubs increased from 22 per cent in 2002/03 to 27 per cent in 2007/08 and further to 35 per cent in 2012/13.

Similarly, average expenditure on transport increased from $700 to $810 monthly between 2007/08 and 2012/13, due mainly to higher spending on passenger air travel and private transport.

Expenditure on public transport rose marginally from $160 to $170 over this period.

Over a 10-year horizon, while expenditure on transport increased by around $200, public transport expenditure rose by less than $20. Passenger air travel and private transport contributed to the bulk of the increase.

Ownership of Consumer Durables Rose

Home ownership rate among resident households remained high at 89 per cent in 2012/13. Even among the lowest 20% households, 82 per cent were home owners.

Reflecting improvements in standards of living, the ownership of consumer durables among households of different income groups and house types increased in 2012/13, compared to 2007/08 and 2002/03.

In 2012/13, ownership of television sets and washing machines was near universal at 98 per cent and 96 per cent respectively.

More households also opted for better quality items such as Liquid Crystal Display (LCD)/Plasma/Light Emitting Diode (LED) television (TV) sets over Cathode Ray Tube (CRT)/projection TV.

Furthermore, ownership of mobile phones, personal computers and air-conditioners became more common, not only among the higher income groups but also the lower income groups.

Some 86 per cent of households living in HDB 1- and 2-room flats owned a mobile line in 2012/13, up from 65 per cent in 2007/08 and 56 per cent in 2002/03.

Across all households, personal computer ownership increased from 70 per cent in 2002/03 to 77 per cent in 2007/08, and further to 83 per cent in 2012/13.

The rise in ownership of personal computers over the last 5 years was more significant for households in the lower and middle income quintiles, as well as households living in HDB 1- to 4-room flats.