The monthly CommBank Household Spending Insights (HSI) Index fell -0.3 per cent in February 2024 to 141.61, led by declines in household goods and transport, as consumer spending continues to soften.
Despite the overall spending decline, Australians are still prioritising experiences, with a 0.7 per cent rise in the hospitality category in February, fuelled by a 76 per cent jump in spending at music festivals. Likewise, a 115 per cent surge in spending at function and event centres drove the recreation category up 0.5 per cent in the month.
These increases however weren’t enough to offset spending decreases in seven of the CommBank HSI Index’s twelve underlying categories, led by falls in household goods (-1.9 per cent) and transport (-1.6 per cent). The declines were partially offset by increases in spending across utilities (+0.8 per cent), hospitality (+0.7 per cent), health (+0.6 per cent) and recreation (+0.5 per cent).
Queensland was the only state to see an increase in spending in February 2024 but it remains below the national growth rate on the year. The largest falls for the month were seen in the Northern Territory (-3.2 per cent), the ACT (-2.0 per cent) and Victoria (-0.8 per cent).
CBA Chief Economist Stephen Halmarick said the fall in February continued the volatility seen in household spending over the summer months and reflected the ongoing softening of consumer spending.
“February was a big month for concerts and big social events in Australia and consumers clearly prioritised tickets to see their favourite artists like Taylor Swift, with spending up on musical festivals, as well as spendings on flights and hospitality venues, likely associated with the headline concerts. However, the jump in hospitality and recreation spending wasn’t enough to offset weakness across seven of the 12 categories of the Index, which paints a picture of consumers cutting back,” Mr Halmarick said.
“It’s important to note the annual rate of increase of the HSI Index has fallen to 3.5 per cent, which is close to flat in real terms when an inflation rate of 3.5 to 4 per cent is taken into account.
“We expect to see continued softening of household spending in the near term as the November 2023 interest rate hike takes hold, which together with decelerating inflation supports our view that the RBA can commence official interest rate cuts in September this year.”
The CommBank HSI index tracks month-on-month data at a macro level and is based on de-identified payments data from approximately 7 million CBA customers, comprising roughly 30 per cent of all Australian consumer transactions.
1Seasonally adjusted terms.
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