Travel and gyms boosts household spending: CBA HSI

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As people make New Year resolutions.

The rise of spending on travel and gyms as Australians made New Year’s resolutions and took advantage of the holidays saw consumer spending rise 3.1 percent according to the latest CommBank Household Spending Intentions Index (HSI). 

Travel and gyms boosts household spending: CBA HSI

The CommBank’s HSI saw spending rise across nine of its 12 underlying categories, although most were light gains following the falls recorded in December 2023, according to the report. 

Findings are based on de-identified payments data from around 7 million CBA customers, covering roughly 30 percent of all Australian consumer transactions.

“The exception was recreation spending (travel agencies, online travel bookings, airlines, cruise lines and fitness clubs/gyms), which was up a significant 13.5 per cent in January after a 5.8 per cent decline in December,” the report said [pdf].

“Household goods spending was up a strong 10.5 percent in January, but this did not fully offset the 14.9 per cent decline in December.”

In the report, it was found “modest increases” were seen in hospitality (+2.2 percent), education (+1.9 percent), communications and digital (+1.2 percent) and utilities (+1.1 percent). 

Other slight increases were identified across insurance (+0.7 percent), health (+0.6 percent) and food and beverage (+0.1 percent). 

These gains were partly offset by reduced spending on motor vehicles, household services and transport.

Across the country, Victoria saw the largest spending life, up 2.8 percent on the month, as international sporting events such as the Australian Open drove inbound tourism. 

CBA chief economist Stephen Halmarick said, “The trend for Australian household spending is softening, with the bounce in January not enough to make up the declines from December.”

“With the annual rate of inflation in January expected to be approximately 3.5 percent, household spending is close to flat in real terms and remains weak on a real per capita basis,” Halmarick said. 

Halmarick said CBA expects “to see an ongoing softening in consumer spending in coming months as the RBA November 2023 interest rate increase flows through to mortgage repayments and further constrains household budgets. 

“Economic growth in Australia is moderating. We expect to see a further slowdown in the pace of household spending through the first half of 2024. 

“Together with decelerating inflation, softer household spending supports our view that the RBA can start to lower interest rates in September this year,” Halmarick concluded.  

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