5 earning and spending trends we learned from SingStat's Household Expenditure Survey 2017/18

Last month, SingStat released the long-awaited results of the quinquennial Household Expenditure Survey 2017/18.

For those who are not aware the Household Expenditure Survey (HES) is conducted every five years to collect detailed expenditure data of resident households in Singapore. The data collection is done over an entire year to capture seasonal expenditure.

This data is used for further expenditure and income studies, as well as to update the expenditure basket for the Consumer Price Index (CPI).

As statistics geeks, we at DollarsAndSense combed through the 346-page document with zeal and curiosity as soon as the report was released.

On average, Singapore households spent an average of $4,906 a month on goods and services, which is an increase of 4 per cent from $4,724 in 2012/13.

This works out to an increase of only 0.8 per cent per annum on average. Fortunately, household income has outpaced the modest increase in household expenditure.

Over the same five-year period, Singapore resident households' average monthly household income from all sources increased 2.4 per cent per annum in nominal terms to $11,780 (from $10,470 in 2012/13).

Here are five other important and interesting insights we found from the Household Expenditure Survey 2017/18 report.

#1 WHAT ARE SINGAPORE HOUSEHOLDS SPENDING THE MOST ON?

The three largest categories of household expenditure are Housing (28.9 per cent), Food (20.3 per cent) and Transport (13.2 per cent), which together make up 62.4 per cent of Singaporeans' monthly household expenditure.

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In case you're wondering, Housing expenditure consists of actual and imputed rent, utilities, furnishings, maintenance costs.

If we were to take out imputed rental costs, Housing expenditure would fall to 14 per cent of households' monthly expenditure. Here is how Singapore households' actual expenditure looks like without the imputed rent.

In case you're wondering, the large Other expenditure category includes miscellaneous goods and services like hairdressing, social support services, insurance, alcoholic beverages and tobacco.

#2 55 PER CENT OF HOUSEHOLDS LIVING IN 1-ROOM AND 2-ROOM HDB FLATS DO NOT HAVE AN INTERNET SUBSCRIPTION

Today, most would agree that a lack of access to the Internet would affect one's ability to succeed in school, work, and even life.

For students, the Internet is essential for online research, collecting resources, collaborating with group mates, and submitting assignments.

Those in the working world require Internet access at home to stay connected with the office, and perhaps for landing a job in the first place.

Outside of school and work, the Internet is an important source of communication with loved ones, a (mostly) free source of entertainment, and the means to transact with government bodies and private companies.

Unfortunately, Internet subscriptions among those living in 1-room and 2-room HDB flats are quite low (at 45 per cent), though this is a marked improvement from the 21.5 per cent and 13.2 per cent from 5 and 10 years ago, respectively.

One might say that mobile phones and mobile data has reduced the need for Internet subscriptions at home, but the need to ration your Internet usage because of mobile phone data caps may reduce self-development and other opportunities that individuals might otherwise pursue.

Also, those living in 1-room and 2-room HDB flats would also be the hardest hit by expensive penalties for bursting their monthly mobile data caps and may throttle their own usage way before they are near their monthly limits.

#3 LARGER HOUSEHOLDS ENJOY GREATER ECONOMIES OF SCALE

As you would expect, the average monthly household expenditure increases as the household size increases.

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What might be surprising is that this increase is not linear. In fact, average monthly household expenditure per household member declines as the household size increases from $2,137 for one-person households to $1,351 for households with six or more people.

This can be explained by economies of scale and the sharing of common facilities, such as electrical appliances, home furnishings, Internet subscriptions, and perhaps hand-me-down clothes and toys for kids.

So if you're thinking about having more kids but are worried about affordability, perhaps the statistics indicate things do get easier.

#4 GROWTH IN NON-WORK INCOME AS A PROPORTION OF TOTAL INCOME

The average monthly household income from all sources was $11,780 in 2017/18 (up from $10,470 in 2012/13).

On a per household member basis, the average monthly household income was $3,940 in 2017/18, which represents an increase of 3.4 per cent per annum in real terms from $3,300 in 2012/13.

While employment income still makes up the largest share of households' income, the share of non-work income has increased substantially, especially among the lowest 20 per cent households.

This is attributed to the larger concentration of households comprising solely non-working persons aged 65 years and older who might have lesser income from work, and receive more from regular government transfers and contributions from their loved ones.

Non-work sources of income includes investment, rental, other sources such as pension and contributions from loved ones not staying in the same household, as well as regular government transfers received by individual members and transfers given at the household level.

#5 EXPENDITURE OUTPACED INCOME GROWTH FOR THE 20 PER CENT LOWEST-EARNING HOUSEHOLDS

While income growth data is reassuring, it is important to note that households who belong to the 20 per cent lowest-earning group were the only ones whose expenditure growth (3 per cent per annum) outpaced income growth in nominal terms (2.8 per cent per annum).

Perhaps this is a group of Singaporeans that would continue to benefit most from targeted assistance and means-tested transfers like the GST Voucher Scheme.

This article was first published in Dollars and Sense.