The was flat in July, unchanged at 148.2, as consumers look to prioritise discount shopping options.
Modest spending increases were seen across seven of the 12 spending categories, with the most notable uplifts in Household Goods (+1.3 per cent), Recreation (+0.9 per cent), Communications and Digital (+0.9 per cent) and Insurance (+0.9 per cent).
Gains in Household Goods were led by the thrifty shopper, fuelled by increases in spending at discount stores and online marketplaces as consumers seek cheaper alternatives in the current cost-constrained environment. While a busy sporting calendar supported Recreation spending gains driven by ticketing services, sports grounds/facilities, and online travel bookings.
“There were several sporting events in July – such as the NRL State of Origin decider and the Wallabies rugby tests – that likely boosted recreational spending however this wasn’t enough to offset weakness across other categories of the Index, as consumers continuing to cut back,” CBA Chief Economist Stephen Halmarick said.
“We’re also seeing changes in shopping behaviours within categories, as consumers look for cheaper alternatives, like second-hand bargains and discount store sales.”
Household spending in July saw the biggest falls across Hospitality (-2.4 per cent), Utilities (-1.3 per cent) and Food & Beverage (-1.2 per cent).
“Hospitality spending dropped in July and has been the weakest category over the past year, as consumers cutback on visiting cafes and bars.”
The annual HSI growth rate increased to 4.5 per cent for the year, but with biggest increases seen in essential services such as Insurance (+15.9 per cent) and Health (+13 per cent).
The disparity in spending remains across home ownership status, with spending by renters up just 0.3 per cent for the year to July compared to mortgage holders (+3.3 per cent) and those who own their home outright (+4 per cent).
“Spending by renters remains close to flat this year with significantly more cutbacks on discretionary spending compared to homeowners or those with a mortgage,” Mr Halmarick said.
Mr Halmarick said it was too early to tell how the Federal Government’s income tax cuts would impact household spending.
“As income tax cuts have only just taken effect, we will likely have a clearer picture of impacts on spending behaviour over the coming months. More broadly, we expect that softer economic data, a further deceleration of inflation, and easing of monetary policy by overseas centrals banks will see the RBA begin to cut interest rates in the months ahead.”
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.
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