The monthly CommBank Household Spending Insights (HSI) Index increased 0.2 per cent in March to 141.81 led by shoppers stocking up the fridge ahead of the earlier-than-usual Easter break.

The spending uplift was led by Food & Beverage (up 4.0 per cent) and Transport (up 4.2 per cent). Supermarkets, liquor stores, convenience stores, butchers and bakers were the major recipients. While on the roads, higher fuel prices and the Easter long weekend saw increased spending at petrol stations (+7.4 per cent), ride sharing services (+14.5 per cent) and public transport (+6.7 per cent).

New South Wales saw a significant increase in spending, up 2 per cent, to move from well below the national average to above the national average. Western Australia remains the strongest state for the year to March (+4.3 per cent), while spending in the NT was the weakest at -0.9 per cent, joining Tasmania, Victoria and the ACT below the national average.

While 10 of the 12 HSI spending categories increased in March, the rise across most categories was modest and the HSI Index remains lower than the 142.6 reading in November 2023, pointing to a softening of household spending since the final RBA rate hike that month.

Notably, spending on household goods fell for the third time in four months (-1.7 per cent), suggesting household budgets are adjusting to the tough environment by prioritising spending elsewhere. Recreation was also down 6.8 per cent in March, following a spending boost at summer music events. Household goods spending is now negative for the year, while Recreation spending is up a small 0.4 per cent year to March. These trends are also reflected in the fact that spending on essentials is up 4.4 per cent in the year to March, while spending on discretionary items is up just 1 per cent.

CBA Chief Economist Stephen Halmarick said that despite a boost from Easter, the March HSI continued to paint a picture of a soft consumer.

“Much of the spending lift in March can be attributed to the earlier-than-usual Easter holidays with people travelling and entertaining at home. Beyond Food & Beverage and Transport, gains in other categories were modest, and another fall in spending on Household Goods suggests consumers are prioritising spending on essentials,” Mr Halmarick said.

“The annual rate of increase of the HSI Index is steady at 3.4 per cent, which is close to flat in real terms when an inflation rate of 3.5-4 per cent is taken into account.

“Since the November RBA interest rate rise we’ve seen consistently soft household spending and we retain our view that, when coupled with decelerating inflation, the RBA can start lowering the official interest rate in September this year.”

Despite the challenging economic conditions, Australians showed their generosity in March, with a 1.4 per cent increase in the Household Services categories driven in part by increased spending on charities.

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.

Read the March HSI.

1 Seasonally adjusted terms.

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Things you should know

  • NOT INVESTMENT RESEARCH. The Commonwealth Bank ‘Household Spending Insights’ is not investment research and nor does it purport to make any recommendations. The Commonwealth Bank ‘Household Spending Insights’ has been prepared without taking into account your objectives, financial situation (including your capacity to bear loss), knowledge, experience or needs. You should not act on the information contained in this document. To the extent that you choose to make any investment decision after having read this document, you should not rely on it but consider its appropriateness and suitability to your own objectives, financial situation and needs, and, if appropriate, seek professional or independent financial advice, including tax and legal advice. The data used in the ‘Commbank Spending Insights’ series is a combination of CBA Data and publicly available Australian Bureau of Statistics (ABS), CoreLogic and Reserve Bank of Australia data. Any reference made to the term ‘CBA data’ means the proprietary data of the Bank that is sourced from the Bank’s internal systems and may include, but is not limited to, home loan data, credit card transaction data, merchant facility transaction data and applications for credit. All customer data used, or represented, in this report is de-identified before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy. Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945

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