Australia’s consumer spending picked up in July, with major sporting fixtures helping to lift household activity and support signs of a broader rebound.
The CommBank Household Spending Insights (HSI) Index rose 0.8% in July, with recreation (+1.8%) and hospitality (+1.5%) leading the gains. The British & Irish Lions rugby tour and State of Origin decider both boosted demand for travel, entertainment, and accommodation.
CBA Senior Economist Belinda Allen (pictured) said the past five months of steady gains suggest confidence is returning.
“We have been anticipating a lift in household spending for some time, supported by rising real disposable incomes, increased household wealth, and a resilient labour market,” Allen said in a media release.
“Although the recovery has taken longer than expected to materialise, the consistent growth in recent months gives us confidence that momentum is building.
“We expect a further pickup in spending through the rest of this year and into next, helping to drive a broader economic recovery.”
The update follows CBA’s FY25 results, which showed statutory NPAT up 7% to $10.13 billion, supported by lending growth, stable margins, and lower impairment expenses. CEO Matt Comyn said recent interest rate cuts, lower inflation, and tax changes had already lifted disposable incomes for many households — trends likely to support further spending growth.
Ten out of 12 categories recorded growth in July. Alongside recreation and hospitality, gains were seen in motor vehicles (+1.4%), insurance (+1.2%) and health (+1.1%). Education spending was flat, while utilities (-0.5%) was the only category to fall.
Year-on-year, the HSI Index is up 6.4%, with the strongest annual growth in communications and digital (+10.9%), recreation (+10.3%), and hospitality (+10%). Education (-1.8%) remains the weakest category, while utilities spending has turned positive as cost-of-living energy subsidies are phased out.
“Strong growth in spending on recreation and hospitality over the year underscores that consumers are prioritising experiences and being deliberate about their spending choices,” Allen said. “This was especially evident in July, when the British & Irish Lions tour and the State of Origin decider drove a surge in spending on these categories.”
With RBA having already reduced the cash rate in August, another cut is expected in November, which would take the rate to 3.35%.
“Following the August interest rate cut, we expect the RBA to cut the cash rate once more in November to 3.35%,” Allen said. “A lower rate environment should help fuel consumer optimism and spending in the year ahead, and into 2026.”
For brokers, the combination of stronger consumer sentiment, higher disposable incomes, and lower borrowing costs could support more borrower activity heading into the new year.
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