The Commonwealth Bank’s Household Spending Intentions Index for October showed this surge is being driven by travel, entertainment and services as locked-down Aussies enjoyed new freedoms.
The biggest monthly rise was travel, up 52.7 per cent on last month and 13.5 per cent year-on-year, as people seized the chance to book a getaway or take a quick break away once restrictions eased. This was followed by household services, up 24.1 per cent, which includes beauty services and cleaners as well as home improvement services.
Transport was up 20.7 per cent driven by areas like car washes and taxi services, as people started moving around again, although public transport like rail remained weak, suggesting a residual reluctance due to COVID-19 risks.
Meanwhile, entertainment was up 14.7 per cent on last month, although it was still down 7.2 per cent year-on-year as venues continued to be subject to restrictions. And retail was up 1.9 per cent.
“After months of lockdown, Australians are finally free to spend again. The strong index reading for October underscores pent-up demand across the economy, particularly for lockdown-affected sectors such as travel, transport and household services,” said Stephen Halmarick, chief economist and head of global economic and markets research at Commonwealth Bank.
He added that while lockdowns had stymied some activities, the underlying economy remains strong and this data supports a robust recovery.
Although home buying and cars both fell over last month, the long-term demand is still strong. Spending on home buying was down 1.4 per cent, although it remains 12.4 per cent up on the annual rate. Motor vehicles were down 1 per cent due to constraints with supply, but still up 32 per cent from October 2020, indicating people are wanting to buy cars, but there’s simply not enough available.
The data is compiled by the bank from its card spending, which covers 2.5 million households and approximately 40 per cent of payment transactions, as well as loan application information and Google Trends publicly available search activity.