Household spending intentions fall by 3.8% in April

The CommBank Household Spending Intentions (HSI) Index fell by 3.8 per cent to 112.3 in April after reaching a record high in March, led by falls in home buying, health & fitness and transport spending – while spending rose across the travel, entertainment and retail sectors.

Home buying spending fell by 21.5 per cent after gains in February and March, and is 13.1 per cent lower than in April last year. Health & fitness spending fell by 14 per cent, but is still up 2.9 per cent year on year. Transport spending fell by 8.6 per cent largely due to the reduction in the petrol excise and lower fuel costs, but remains 13.5 per cent higher over the year.

Travel spending reached a new record high in April and exceeds its pre-COVID peak, gaining 10.6 per cent during the month and 41 per cent on April 2021. Spending on travel agents, airlines, cruise ships, tourist attractions, hotels & motels and bus lines all increased, with a decline in camper & RV rentals reflecting changing travel patterns with the reopening of state and international borders.

Entertainment spending rose by 6 per cent in April led by increased activity in record stores, concerts and theatre alongside eating & drinking out, but remain 1.8 per cent lower year on year. Retail spending rose by 0.3 per cent – a strong reading with April normally a seasonally weak month.   

Commonwealth Bank of Australia Senior Economist, Belinda Allen, said the seasonal volatility of April data due to additional public holidays meant that year on year movements better reflected the state of the economy, with the CommBank HSI Index up by 5 per cent on April last year.

“With an interest rate hiking cycle now underway the Australian economy is in a strong position. We are seeing a post COVID normalisation of consumer spending patterns, with lower spending on categories that increased during lockdowns like health & fitness, while higher travel and entertainment spending reflects more people being out and about.

“We expect a fairly shallow hiking cycle, with further interest rate hikes in June, July, August and November 2022 and one final hike in February 2023 taking the cash rate to 1.60 per cent. Going forward, it will be important to watch discretionary spending categories like home buying, motor vehicles, retail and entertainment to judge the impact of interest rate rises.

“Households have accrued a very high level of savings during COVID, the labour market remains tight and wages growth is accelerating. These factors will assist families with higher mortgage repayments over coming months,” Ms Allen said.

The CommBank HSI Index combines analysis of CBA payments data (Australia’s largest consumer spending data set covering approximately 40 per cent of payment transactions), loan application information and Google Trends publicly available search activity data. To access this powerful insight into spending trends visit www.commbank.com.au/hsi

Disclaimer

The information contained in this media release is published solely for informational purposes and provides general market-related information, and is not intended to be an investment research report. This media release has been prepared without taking into account your objectives, financial situation (including the capacity to bear loss), knowledge, experience or needs. Before acting on the information in this media release, you should consider its appropriateness and, if necessary, seek appropriate professional or financial advice, including tax and legal advice. The data used in this media release is a combination of ‘CBA transaction data’ and Google Trends™ data. Google Trends is a trademark of Google LLC. The term ‘CBA transaction data’ refers to the proprietary data of the Commonwealth Bank of Australia ("the Bank") that is sourced from the Bank’s internal systems and may include, but is not limited to, credit card transaction data, merchant facility transaction data and applications for credit. All customer data used or represented in this media release is anonymous and aggregated before analysis, and is used and disclosed in accordance with the Bank’s Privacy Policy Statement. The Bank takes reasonable steps to ensure that its proprietary data is accurate and that any opinions, conclusions or recommendations are reasonably held, or are made at the time of compilation of this media release. As the statistics take into account only the Bank’s data, no representation or warranty is made as to the completeness of the data and it may not reflect all trends in the market. 

Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945.