Recreation has become the clear weak point in Australian household spending, with new CommBank data showing it is the only major category in annual contraction.
Recreation spending fell 2.6% in April in seasonally adjusted terms and is now down 0.4% over the year, the weakest result since February 2021.
The latest Household Spending Insights (HSI) report points to households paring back travel and leisure in response to higher costs and geopolitical uncertainty.
“It appears households may be lowering their travel related consumption in the face of higher costs and uncertainty from the conflict in Iran. This is picked up in the broader recreation category,” CommBank head of Australian economics Belinda Allen (pictured) said in a media statement.
While recreation and transport pulled back, the overall HSI index also eased. Total household spending slipped 1.2% in April after a 2.9% jump in March. Excluding transport, outlays were still 0.2% lower, signalling a generally softer month for consumer activity.
Transport recorded the sharpest monthly fall, dropping 12.1% as petrol prices moved lower following the 1 April cut to fuel excise and free public transport in Victoria and Tasmania.
“Petrol price movements continue to have a big impact on the month-to-month swing in household spending, and we expect households to do much of the heavy lifting over coming months in slowing spending and cooling inflation,” Allen said.
Across the HSI’s 12 categories, six declined and six rose in April. Education was the strongest monthly performer, up 1.5%, driven by private schools. Utilities, food, and beverage goods and household goods each increased 0.4%. On an annual basis, utilities remained the standout, up 17.6% after the end of energy rebates, while transport spending was 9.8% higher than a year earlier.
The softer national picture was broadly reflected across the states. Tasmania was the only jurisdiction to record a rise in April, lifting 0.2%. South Australia and Victoria were flat, while Western Australia, Queensland, New South Wales and the ACT each posted a 0.2% monthly decline.
Annual household spending growth across all categories slowed to 5.5% in April, down from 8.5% in March when higher petrol prices had temporarily boosted the index.
“We have been expecting household spending to slow,” Allen said. However, she cautioned that “The April data was softer. But it's too early to judge whether this marks a broader trend,” with future readings set to show whether households continue to rein in discretionary outlays.
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
