The monthly CommBank Household Spending Insights (HSI) Index rose 0.5% to 137.4 in September, led by increased spending on hospitality and food and beverages, higher petrol prices and increased education spending.
However, spending declined in five of the CommBank HSI Index’s 12 underlying categories including recreation, utilities, health, household goods and household services, as “annual spending growth dropped to 1.8% from a peak of 18.7% in August 2022 – well below the current rate of inflation and despite strong population growth. A separate Home Buying Index also declined 0.4% in the month of September.”
“School holidays and the AFL and NRL finals series helped drive hospitality spending up 2.7% in September, with increased spending in pubs, bars, fast food outlets and restaurants. Increased liquor store spending and higher prices also saw food and beverage 2.2% higher.”
The CommBank HSI index – which is based on de-identified payments data from approximately seven million CBA customers, comprising roughly 30% of all Australian consumer transactions – also showed “transport spending 1.5% higher in the month, reflecting a 3% increase in petrol prices. There was continued strong education spending which rose 1.4% due an increase in overseas university students.”
Victoria saw the joint biggest spending growth among the states driven by the AFL finals series, with spending up 1.5% on the month. This reverses the recent trend of Victoria having the weakest monthly spending growth, but its annual spending growth remains the weakest of any state at just 0.2%. ACT also saw spending growth of 1.5%, up from 1.1% in August. NSW and Queensland had modest monthly spending growth of 0.6%, while Tasmania was softest on the month with a fall of -0.1%.
CBA Chief Economist Stephen Halmarick says: “The monthly increase in the CommBank HSI Index has stabilised at 0.5-0.6% since June, up from an average increase of 0.2% from February to May. Recent household spending data has proved more resilient than expected. Part of this is price driven, but it also reflects strong income growth from the tight labour market and accumulated savings.
“Although the annual growth rate of spending remains weak, the lift of the Commbank HSI Index in September shows that the risk of a higher Reserve Bank of Australia cash rate remains. Forthcoming CPI and wages data for Q3 2023 will be critical for the future direction of interest rates.”
The CommBank HSI Index uses all CBA credit and debit card transactions (including ATM, BPAY and direct debit payments) to show national and state-based Australian consumer spending each month.
