New CommBank data shows Aussies are spending big, fueled by Christmas and the post-Delta desire to get out and about.
The CommBank Household Spending Intentions Index rose by 2.5 per cent to 115.0 in December.
This is the highest level since the series commenced in July 2017.
The biggest gains have been in the travel, transport and retail sectors.
The index shows strong Christmas trading was boosted by the lifting of Delta restrictions, with accumulated household savings during COVID (estimated at $A260 billion) also powering the surge.
Travel spending intentions rose 28.1 per cent during December as a result of the reopening of state borders and an upswing in summer holiday spend.
Travel-related spending is up 20.9 per cent from December 2020 but it remains lower than December 2019.
Hotels, motels and resorts, travel agents, tourist attractions, trailer parks and campground categories have all seen increases, while airline spending remains weak.
Transport spending intentions jumped 11.8 per cent in the month.
Higher petrol prices were a key factor as spending at service stations continued to lift, along with spending on taxi services, tolls, car washes and trailer rentals.
That said, transport spending intentions are still below pre-COVID levels, with public transport spending still weak due to the shift to working from home.
Retail spending intentions rose 10.8 per cent in December and are 2.8 per cent higher than December 2020.
This has been driven by increases in spending on speciality retail stores, department stores, clothing stores, electronic stores, jewellery and watch stores and hardware stores.
Interestingly, spending at liquor stores fell as consumers continued to shift to eating and drinking outside the home.
CBA, senior economist, Belinda Allen, said, “The household spending data for December showed a sustained recovery from the Delta lockdowns.”
She added, “The Omicron variant, which has led to a surge in COVID cases late in December and into January, is an important development to watch.”
CBA economist Stephen Wu also noted, “That consumer spending had already dropped by around 3 per cent over January as a result of the latest spike in COVID cases.”
While there is always Christmas spending volatility, Wu stated, “The surge in COVID cases over the past three weeks has resulted in around 3 per cent less spending over the period than would otherwise have been the case.”
Read more about CommBanks January report here.
