Australia’s digital economy is displaying significant resilience in an economic environment characterised by volatility. While national online spending has experienced a downturn, particular sectors and regions have managed to navigate the economic storm, registering growth, as revealed by the Q2 Digital Economy Index from Airwallex, a prominent financial tech firm.
The index, which evaluates quarterly and yearly expenditure per adult and offers comprehensive breakdowns by state and industry, indicates that Australians, on average, have reduced their online spending by around $600 compared to the previous year. Despite a nationwide drop of 1.82%, equating to a $523.3 million dip for Q2 2023 compared to Q2 2022, Victoria, Queensland, Tasmania, and Western Australia have demonstrated a significant expansion in their digital economies.
Bright spots in the online education and travel sectors have emerged, indicating increased spending, but declining retail, insurance, and self-directed investment trends have somewhat eclipsed these.
The index, accessible in full after this article, shows a mixed data bag. A marked decrease in revenue turnover in New South Wales (-7.93%) is primarily due to a slump in online subscriptions (-17.75%) and travel spending (-9.15%). However, digital travel enterprises are witnessing a rebound compared to Q1 2023 (+15.11%).
Victoria’s digital businesses have posted nearly a 6% uptick in revenue turnover compared to Q2 2022, underpinned by increased e-commerce (+8.28%) and education spending (+4.24%). Online travel expenditure continues to lag behind, with a slight drop of -1.91%.
Queensland’s digital economy, with a growth of +3.90% compared to the previous year, has been boosted by a rise in online travel expenditure (+5.2%), despite observed contractions in online education (-5.55%) and e-commerce (-5.60%).
Western Australia’s digital economy witnessed a 2.81% annual growth, attributed to a surge in technology and digital content expenditure (+5.22%) and online travel bookings (+6.77%). However, WA’s e-commerce sector recorded a year-on-year drop in spending by 7.71% and a quarterly decrease of 4.9%.
South Australia’s digital economy underperformed in this quarter, with a 16.77% contraction in online spending and a decline across all digital industries for the same period compared to Q2 2022 and Q1 2023.
Tasmania’s digital economy continues to thrive with a 12.8% yearly growth in revenue turnover, primarily driven by a 15.01% surge in online travel. However, a quarter-on-quarter drop of -4.89% suggests potential slowdowns ahead.
Amelia Hamer, Airwallex Director of Strategy for Australia and New Zealand, opined that the economic uncertainty has had uneven impacts across Australia. As cost-of-living pressures escalate and interest rates rise, Australians make more selective online spending choices.
“Despite these pressures, we can identify encouraging signs in the tech, education, and travel sectors, which have demonstrated significant potential,” Hamer stated. “The post-COVID travel bounceback is evident, with destinations like Queensland, Tasmania, and WA benefiting from increased online travel bookings. However, NSW is most affected by the downturn, a trend echoed in other states’ quarter-on-quarter comparisons.”
These trends illuminate a path forward for Australia’s digital economy amidst broader economic uncertainties, pointing towards the potential for resilience and growth in unexpected areas.
Written by: Jill Walsh
