The CommBank Household Spending Insights (HSI) Index rose 0.9% in March.
According to the bank, this was buoyed by a lift in recreation and hospitality spending off the back of Melbourne Grand Prix and the return of the winter football codes.
Modest gains were seen across all 12 spending categories for the month, led by education which surged 4.3% amid rising tuition fees and the start of the academic year. Notable uplifts were also seen in insurance (up 1.6%), recreation (up 1.4%), hospitality (up 1.2%), the latter showing its first lift since December.
“While it’s encouraging to see a rebound in spending this March, particularly across discretionary categories like recreation and hospitality, it’s premature to call this a turning point, as the overall pace of spending growth remains lower than the final quarter of 2024,” says CBA Senior Economist Belinda Allen.
“We expect interest rate cuts over the coming year to see consumers loosen their purse strings, but global uncertainty from the U.S tariffs may impact this recovery. It’s worth noting Australia is well placed to weather the global economic volatility and remains in a structurally sound position with limited direct impacts from the US tariffs. At the same time, the RBA has room to cut rates if required.”
Over the past 12 months, spending was up 5.6%, with the strongest growth concentrated in essential services where inflation remains elevated and premiums have risen such as insurance (up 15.3%), education (up 12.7%), health (up 11.9%) and household services (up 9.2%). In contrast, transport was down 3.3% annually, led by lower petrol prices.
Renters continue to show the weakest spending growth, with the annual rate of spending in original per capita terms rising by 2%, well below owners with a mortgage (up 3.2%) and those who own their home outright (up 3.5%).
“Queensland saw the softest growth rate in March, with spending rising just 0.1% following ex-tropical cyclone Alfred,” says Ms Allen.
Spending gains were led by South Australia (up 1.2%) and the Northern Territory (up 0.9%).
