The CommBank Household Spending Insights (HSI) index reported a raise in spending in August, with a positive trend towards spending in hospitality venues and on takeaway liquor.
With government energy rebates kicking in, households found themselves with a bit more disposable income in August, leading to spending increasing in 10 out of 12 categories. In addition, Father’s Day occurring on 1 September, the earliest it can occur, meant that the majority of gifts were purchased in August.
The last time that this early Father’s Day occurred was in 2019, and lead to an overall weak September HSI index, said CBA Chief Economist Stephen Halmarick said.
“An early Father’s Day boosted spending in August as consumers appear to have lifted spend on household goods, while hospitality venues also saw people open their wallets during the month. The last time Father’s Day fell so early in the year spending retreated in September, which is worth keeping in mind as the annual spending rate still suggests a relatively weak consumer,” he said.
However, September 2019 did indicate a strong month for hospitality spend, which may also be the case this year.
Spending for August 2024 showed an overall 1.2 per cent increase in food and beverage goods, with a 10.4 per cent month-on-month boost in liquor spending, possibly related to the Father’s Day gift giving occasion.
Hospitality venues also saw a 5.2 per cent increase in spending, recovering from a 2.6 per cent decline in July, in seasonally adjusted figures. The majority of this spend came from restaurants, pubs, and bars, but there was a reduction in spending at breweries and wineries.
While August has been positive for both the retail liquor and the hospitality industries, CommBank expects overall 2024 spending to remain soft, though with some possible relief in later months.
“While the earlier timing of Father’s Day has added some complexity to the data, we still anticipate that softer economic conditions, easing inflation, and rate cuts by other central banks will prompt the RBA to lower interest rates later in 2024. However, there is a possibility of delays pushing this into early 2025,” Halmarick said.
The CommBank HSI Index tracks macro level spending based on de-identified payment data from 7 million CommBank customers, representing approximately 30 per cent of all Australian consumer transactions.
