Consumer spending measured by the CommBank Household Spending Intentions Index rose by a modest 0.9 per cent in June to 117.3, while there was clear evidence of weaker discretionary spending following the recent interest rate hikes.
The marginal rise in the index – which combines Commonwealth Bank of Australia (CBA) payments and lending data and Google Trends search information – was narrowly based. While the index is now equal to its record high set in March 2022, the gain in June was mainly driven by increased cost of goods and higher spending in the transport, education and household services sectors.
Australians returning to the office saw transport spending surge 6.7 per cent in June, due to the higher cost of fuels and an increased use of public transport, car parks, taxis and childcare services. Elevated demand for work clothing also drove increased spending on department stores, dry cleaning and tailoring. While transport spending is up 132.2 per cent on June 2021, it remains well below the pre-pandemic levels.
Travel spending intentions rose by 1.5 per cent in June and are up 71.3 per cent on the year, as pent-up demand is unleashed. Travel agencies, cruise lines, airlines, airports, hotels & motels, tourist attractions, sports and recreational camps and bus lines all benefited, although motor home and RV rentals weakened as people looked to holiday further afield.