The newest CommBank Family Spending Insights Index has revealed a slight lower in family spending by 0.3% in February, with the index falling to 141.61.

The decline was led by drops in family items and transport classes, signaling a continued softening in client spending habits. Regardless of the general downturn, Australians confirmed a robust desire for experiences over items, as evidenced by elevated spending on music festivals and occasion centres.

Experiences over items

Amidst the general lower in spending, the hospitality class noticed an increase of 0.7%, with music festivals experiencing a 76% spike in spending. Equally, perform and occasion facilities witnessed a dramatic 115% surge, pushing the recreation class up by 0.5% for the month.

These beneficial properties, nonetheless, had been inadequate to counterbalance declines throughout seven out of the 12 classes inside the CommBank HSI Index, notably in family items (-1.9%) and transport (-1.6%).

Regional family spending highlights

Queensland was the only state to report a rise in spending for February 2024, albeit nonetheless trailing behind the nationwide year-on-year development price. Probably the most vital drops had been noticed within the Northern Territory (-3.2%), the ACT (-2%), and Victoria (-0.8%).

Insights from CommBank chief economist

Stephen Halmarick (pictured above), CBA chief economist, commented on the findings, noting the development of prioritising social occasions and experiences, reminiscent of live shows by widespread artists like Taylor Swift. This shift in spending in direction of music festivals, flights, and hospitality venues displays a broader sample of client conduct favouring experiences, whilst total spending contracts.

“February was a giant month for live shows and social occasions in Australia… with spending up on musical festivals, in addition to spending on flights and hospitality venues, probably related to the headline live shows,” Halmarick stated in a media launch.

“Nevertheless, the leap in hospitality and recreation spending wasn’t sufficient to offset weak spot throughout seven of the 12 classes of the Index, which paints an image of shoppers reducing again.”

The CommBank economist additionally highlighted the importance of the general annual improve price of the HSI Index falling to three.5%, which, when adjusted for inflation, advised a stagnation in actual phrases.

Trying forward, Halmarick stated CommBank anticipates a continued softening in family spending, influenced by the November 2023 rate of interest hike. This development, mixed with slowing inflation, reinforces the assumption that the RBA could start to decrease official rates of interest by September this 12 months.

The CommBank HSI Index, which provides a macro-level snapshot of month-on-month spending tendencies, is derived from de-identified funds knowledge throughout roughly seven million CBA clients. This knowledge represents round 30% of all client transactions in Australia.

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