Spending rebounds as lockdowns end

  • By Zilla Efrat

Australians are back in spending mode, splashing out on transport, travel, retail and household services as lockdowns come to an end.

The CommBank Household Spending Intentions (HSI) Index for November 2021, released last week, is at its highest level since December 2019 and has recovered all the ground lost during the COVID-19 pandemic.

The index, which provides an in-depth measure of Australian consumer spending, rose 2.1 per cent during November to 110.3, driven by firm gains in spending on transport (+21.5 per cent), travel (+14.7 per cent), retail (+9.6 per cent) and household services (+9.4 per cent).

Transport spending has risen 52 per cent since the Delta lockdown low of August 2021. According to the HSI, fuel stations, taxis, tyre stores, car parking, auto repairs, towing, freight and trucking services have led the surge.

Travel spending also rose by a whopping 77 per cent over the same period. Spending on hotels, motels and resorts, travel agents, airlines and tourist attractions showed the biggest gains.

Meanwhile, retail spending is up 21 per cent since its low point in August, with the largest gains in department stores, clothing, furniture and household equipment, electronic stores, household appliances, jewellery and watches and pet shops.

On a further positive note, it looks like end-of-year celebrations have driven higher spending on cosmetics, tailors and alterations, and clothing rentals.

CBA chief economist, Stephen Halmarick, says the data points to a continued recovery in the economy following extended periods of lockdown faced by many Australians.

“The CommBank HSI Index has shown a continued and broad-based recovery in consumer spending since the end of lockdowns. While we have seen sharp increases in categories like transport and travel, there is still plenty of room for further growth,” he says.

“Australians have grown their savings to record levels during the pandemic. CBA estimates households have accumulated approximately $240 billion in excess savings, money that is ready to be spent as we head into Christmas and the signs are good for robust retail sales during this period."

The CommBank HSI Index combines analysis of CBA payments data (the largest consumer spending data set in Australia covering 2.5 million households and around 40 per cent of payment transactions), loan application information and Google Trends publicly available search activity to provide monthly insights into current and future spending trends.