Australian Household Spending Rises 2.9% in March

The rise was primarily driven by a significant increase in transport spending, which accounted for more than half of the overall growth.

According to data from Commonwealth Bank, household spending in Australia increased by 2.9% in March. Spending growth was higher among older age groups and in regional areas of some states.

Data Source

The figures come from Commonwealth Bank's Household Spending Insights report, which is based on de-identified data from approximately seven million customers. The bank states this data represents roughly 30% of Australian consumer transactions. Spending rose across all tracked categories in March compared to the previous month and on an annual basis.

Category Breakdown

Spending increased in all major categories, with transport leading the way.

Transport: Spending in this category increased by 22.9% in March. Spending at petrol stations rose by approximately 45%.
Utilities: Spending increased by 6.9%. Commonwealth Bank noted this coincided with the end of electricity rebates.
Insurance: Spending increased by 2.5%. The bank attributed this to health insurance prepayments ahead of premium increases effective April 1.
Hospitality and Recreation: Hospitality spending increased by 1.2% and recreation spending by 0.9% compared to February.

Analysis by Age Group

The Commonwealth Bank report included age group breakdowns for the first time, revealing significant variation.

Households aged 65 and over increased spending by 14.2% over the year.
Households aged 55-64 increased spending by 9.4% over the year.
Households aged 45-54 increased spending by 7.5% over the year.
All age groups except 18-24 year olds increased their rate of spending growth compared to March 2025.

Commonwealth Bank economist Belinda Allen noted that households aged 65 and over typically have higher disposable incomes and are more likely to benefit from higher interest rates.

Regional Variations

Regional areas recorded stronger annual spending growth than metropolitan areas in most states. Queensland and Western Australia showed particularly strong regional spending growth.

The report noted that regional areas are more exposed to prolonged fuel price increases due to reliance on diesel-intensive operations in agriculture, mining, and freight.

Economic Context and Outlook

Commonwealth Bank economist Belinda Allen attributed the sharp increase in transport spending to higher petrol prices, which she linked to conflict in the Middle East. Allen stated that if elevated fuel prices persist, regional spending is likely to soften.

Commonwealth Bank expects household spending to slow as real household disposable income growth weakens, which the bank states may help ease inflation pressures over time. Allen noted the outlook for consumers will be important for determining the path of interest rates beyond May.

Westpac chief economist Luci Ellis stated that Westpac's transaction data shows a shift in spending habits on fuel, with more people using public transport. Ellis noted that people initially topped up petrol tanks more frequently in response to the Middle East crisis, but that this behavior has since reduced.

The International Monetary Fund has warned governments against subsidies to soften the impact of surging fuel prices, stating that high prices signal scarcity and help recalibrate demand and supply.