In November, the CommBank Household Spending Insights (HSI) Index rose by 1.8%, reaching 142.8, fueled by consumers advancing their holiday shopping to capitalise on Black Friday and Cyber Monday discounts.
Spending increased in nine out of the 12 underlying categories of the CommBank HSI Index, with household goods experiencing the biggest gain, with a significant 9.3% surge, led by increased spending at department stores, discount retailers, activewear outlets, and cosmetic and beauty stores – popular destinations for Christmas gifts.
Other notable increases were observed in spending on recreation (+3%), communications and digital (+1.2%), and household services (+1%). However, spending on transport declined by 3.6%, influenced primarily by a drop in petrol prices, following a 2% rise in October.
Stephen Halmarick (pictured above), CBA chief economist, anticipated the temporary nature of November’s spending surge, attributing it to the now-entrenched behaviour of capitalising on Black Friday and Cyber Monday sales.
“Expecting heavy discounts, consumers are opting to spend big in November,” Halmarick said. “However, we anticipate consumers will pull back on spending in December. Looking ahead, we expect to see continued softening in consumer spending into 2024.”
Halmarick said the recently released September quarter national accounts by the ABS indicated a slowdown in Australia’s economic growth pace, with households facing ongoing pressure from a decline in real household disposable income.
“The November 25-basis-point rate hike by the Reserve Bank of Australia will add further downward pressure to household spending into 2024,” Halmarick said.
The CommBank HSI Index, derived from de-identified payments data from around seven million CBA customers, revealed regional variations, with the Home Buying index declining by -4.6% in November to 93.1, influenced by the RBA’s November rate hike.
“However, home buying activity in the months ahead should be supported by strong demand from Australia’s growing population. This is expected to continue to put upward pressure on dwelling prices in Australia,” Halmarick said.
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