The CommBank HSI index is based on consumer spending data and shows a broad based monthly decline during January, although most spending categories remain higher than in January 2021, with the exception of home buying, entertainment and communications.
Commonwealth Bank of Australia (CBA) economists said the Omicron variant accounted for a 'meaningful' share of this drop.
Source: CBA
CBA Chief Economist Stephen Halmarick said the CommBank HSI Index in January had returned to levels close to September 2021 during the Delta lockdowns, but said he expects a continued economic recovery.
"It is no surprise that spending intentions fell more than normal in January due to the spread of Omicron, with the biggest declines seen in the retail, entertainment and household services sectors," Mr Halmarick said.
"Despite this the index remains 1.4% higher year on year, supporting our view that the economy continues to recover from the worst of the Covid-related slowdown.
"Our latest high frequency credit and debit card data for the week ending 4 February also shows an improvement in consumer spending into early February and we continue to expect the Australian economy to grow by close to 5% in 2022."
The drop in the spending intentions index were largely influenced by a 20.9% drop in retail spending, as well as entertainment (-20.8%), transport (-11.6%) and travel (-10.0%).
| Spending Category | Monthly Change | Yearly Change |
| Travel | -10.0% | +14.9% |
| Transport | -11.6% | +21.9% |
| Retail | -20.9% | +4.4% |
| Entertainment | -20.8% | -18.0% |
| Household | -14.4% | +3.8% |
| Insurance Costs | +0.1% | +3.5% |
| Communications | -2.6% | -2.4% |
| Education | -1.0% | +3.0% |
| Utilities | -0.1% | +1.1% |
| Motor Vehicle | -5.1% | +23.9% |
| Health and Fitness | -3.3% | +9.4% |
| Home Buying | -13.8% | -27.3% |
Source: CBA
The Home Buying index dropped by 13.8% on the month, however January is generally a weaker month for home loan applications.
Google searches related to real estate and property inspections were also lower.
The Household Services index was down a sharp 14.4% in January, after previousLY strong gains.
CommBank economists say the fall in January likely relates to seasonal factors and a reluctance to have home visitors due to Omicron.
Image by Ed Leszcynski via Unsplash
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