Australia’s clothing and footwear market is one of four sectors reporting consumer price index (CPI) deflation in the March 2025 quarter.
This is according to new data from the Australian Bureau of Statistics (ABS), confirming that the fashion market’s CPI fell by 0.8 per cent. This is behind furnishings, household equipment and services (down 0.9 per cent) and recreation and culture (down 1.6 per cent), but just ahead of communications (down 0.3 per cent).
The main contributors to the fall in clothing and footwear were garments and footwear, where CPI fell 1.1 per cent and 3.7 per cent respectively, driven by post-Christmas and back to school sales.
Accessories lifted 1.4 per cent, driven by price rises for gold jewellery.
Over the past twelve months the clothing and footwear category’s CPI rose 1.7 per cent. Accessories (up 7.4 per cent) and garments for women (up 1.7 per cent) were the main contributors.
CPI across all industries rose 0.9 per cent in the March 2025 quarter, and 2.5 per cent annually.
ABS acting head of prices statistics Leigh Merrington said the March quarter increase follows two quarters in a row of 0.2 per cent rises. However, annual inflation was unchanged compared to December 2024 quarter.
When prices for some items move by large amounts, measures of underlying inflation like the trimmed mean can give more insights into how inflation is trending. The trimmed mean is also a key item that the Reserve Bank of Australia considers when issuing monetary policy changes.
“Trimmed mean annual inflation was 2.9 per cent in the March quarter, down from 3.3 per cent in the December quarter,” Merrington said. “This is the lowest annual trimmed mean inflation rate since the December 2021 quarter.”
The main contributors to the overall quarterly CPI rise were housing (up 1.7 per cent), education (up 5.2 per cent) and food and non-alcoholic beverages (up 1.2 per cent).
The quarterly growth in housing was driven by electricity (up16.3 per cent). The rise was driven by increases in electricity prices in Brisbane where most households have used up the $1,000 Queensland State Government electricity rebate resulting in higher out of pocket electricity costs.
Some households in the remaining states and territories also saw rises in electricity bills this quarter. This comes as the impact from the Commonwealth Energy Bill Relief Fund (EBRF) rebates was lower in the March quarter compared to the December quarter due to the timing of rebate payments.
Education prices increased 5.2 per cent this quarter, following the start of the school year. Preschool and primary education rose 5.6 per cent and secondary education rose 6.4 per cent. This is due to higher operating costs being passed on as higher school fees. Tertiary education rose 3.6 per cent due to the annual indexation of university course fees.
The rise of 1.2 per cent in food and non-alcoholic beverages was driven by fruit and vegetables (+2.8 per cent). Fruit and vegetables such as avocados, mangoes, asparagus, tomatoes and lettuce saw seasonal price rises following reduced supply.
Annually, the CPI rose 2.4 per cent, unchanged from last quarter. The main contributors to the annual rise were Food and non-alcoholic beverages (+3.2 per cent), Alcohol and tobacco (+6.5 per cent) and Housing (+2.0 per cent).
Annual goods inflation was 1.3 per cent, up from 0.8 per cent in the previous quarter. The increase in annual goods inflation was primarily due to the rise in electricity, which rebounded this quarter after strong falls in the past two quarters.
Annual services inflation was 3.7 per cent in the March quarter, down from 4.3 per cent in the December quarter.
“This is the lowest annual outcome for services inflation since the June 2022 quarter, reflecting easing inflation across a broad range of services, including rents and insurance,” Merrington said.