Household goods spending has fallen by a further 1.7 per cent in March 2024, after a revised fall of 2 per cent in the month prior.
This is the second-largest monthly fall across all 12 spending categories according to Commonwealth Bank’s Household Spending Insights (HSI) data, dragging overall spending down to a near-flat lift of 0.2 per cent.
For household goods, in particular, its 1.7 per cent slump in March comes as the annual rate of change in household goods spending dropped into negative territory at minus 0.7 per cent, down from a lift of 0.8 per cent in February and a peak of 24.3 per cent in August 2022 when Australia came out of pandemic lockdowns.
In the year to March 2024, the largest increases in household goods spending were at online marketplaces, discount department stores, used and second-hand stores, discount and variety stores and hardware stores. This was offset by reduced spending on women’s clothing stores, household appliances stores, luxury boutiques, furniture stores and bathroom retailing.
Alongside the slump in household goods, recreation spending recorded the largest drop of 6.8 per cent. This coincides with a 4.4 per cent lift in spending in the year to March, while spending on discretionary items is up just 1 per cent.
However, CommBank claims the spending drag across these two categories were offset by shoppers stocking up the fridge ahead of the earlier-than-usual Easter break.
Food and beverage spending lifted by 4 per cent, while transport rose by 4.2 per cent. On the roads, higher fuel prices and the Easter long weekend saw increased spending at petrol stations (7.4 per cent), ride sharing services (14.5 per cent) and public transport (6.7 per cent).
New South Wales saw a significant increase in spending, up 2 per cent, moving from well below the national average to above the national average.
Western Australia remains the strongest state for the year to March (up 4.3 per cent), while spending in the Northern Territory was the weakest at negative 0.9 per cent, joining Tasmania, Victoria and the ACT below the national average.
While 10 of the 12 HSI spending categories increased in March, the rise across most categories was modest and the HSI Index remains lower than the 142.6 reading in November 2023, pointing to a softening of household spending since the final RBA rate hike that month.
CBA chief economist Stephen Halmarick said that despite a boost from Easter, the March HSI continued to paint a picture of a soft consumer.
“Much of the spending lift in March can be attributed to the earlier-than-usual Easter holidays with people travelling and entertaining at home,” Halmarick said. “Beyond food and beverage and transport, gains in other categories were modest, and another fall in spending on Household Goods suggests consumers are prioritising spending on essentials.
“The annual rate of increase of the HSI Index is steady at 3.4 per cent, which is close to flat in real terms when an inflation rate of 3.5-4 per cent is taken into account.
“Since the November RBA interest rate rise we’ve seen consistently soft household spending and we retain our view that, when coupled with decelerating inflation, the RBA can start lowering the official interest rate in September this year.”
Despite the challenging economic conditions, Australians showed their generosity in March, with a 1.4 per cent increase in the Household Services categories driven in part by increased spending on charities.
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.