HSI index records first monthly fall in 18 months
The latest CommBank Household Spending Insights (HSI) index has flashed an early warning sign for the consumer economy, recording its first monthly fall since September 2024 in February.
The HSI slipped 0.5% in seasonally adjusted terms in February. While the headline move is modest, the detail shows a clear rotation away from discretionary categories and big declines in a couple of key essentials.
Utilities fell a sharp 6.4% month‑on‑month, the largest fall across the index. This comes after strong gains in December and January and reflects a mix of seasonal bill timing, government rebates and ongoing re‑pricing in electricity and gas.
Despite the monthly fall, annual utilities spending is still up about 8% year‑on‑year, with electricity and gas remaining a major cost pressure for households.
Education spending dropped 1.0% over the month, matching recreation for the largest monthly fall outside utilities. Over the year, education is down 4\% in original terms, making it the weakest category in the February 2026 HSI index.
Recreation spending fell 1% in February after a 1% rise in January. Annual growth, however, has accelerated to around 9.2%, making recreation one of the strongest contributors to spending over the past year
The transport category declined 0.8% month‑on‑month, following a 1.2% fall in January.
Hospitality was down 0.2% in February, partly reversing a 0.2% gain in January. Annual growth has slowed from around 9.1% to 6.5%. Consumers are still going out, but the pace of growth in cafes, restaurants, pubs and event venues is clearly easing.
Spending on big‑ticket and household goods was generally steady in February. Food and beverage spending was up 0.2% on the month and 3.2% over the year. Supermarkets, convenience stores and fresh food outlets continue to see solid growth, even as some discretionary food categories such as liquor and weight‑loss services weaken.
Health, household services and communications and digital were all up slightly.
“Spending had been remarkably resilient over the last 12 months, buoyed by a sharp lift in real household disposable income and an increased marginal propensity to consume,” said CBA analysts.
They noted that the pull back in spending in February coincided with the Reserve Bank of Australia (RBA)’s decision to lift the cash rate by 25 basis points, although “we judge it is too early to tell if this was coincidence or the start of a slowing trend in household consumption growth”.
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