Overview of Card Spending
Card spending has been relatively flat, but there are some positive signs, according to a detailed data pack compiled by ANZ chief economist Sharon Zollner. The data highlights that the "very cyclical" durables spending is actually showing the greatest rate of annual growth, with 6.3%. Overall card spending was up 0.1% in October, and spending is up 3.2% compared to the same time last year.
Trends in Different Categories
Zollner notes that motor vehicles & fuel spending has been dragged down by lower petrol prices, and apparel spending is flat. However, all other store types now have annual spend growth back in the black. It’s possible to create a "rough proxy" for "real" card spending by dividing total card spend by the Consumer Price Index, and the trend in this proxy for ‘real’ card spending remains flat, as it has been for 18 months.
Spending in Specific Sectors
There are four sectors – apparel, motor vehicles & fuel, housing durables, and hospitality – that still have spending well below early-2023 levels. However, hospitality is showing the most signs of life, with a definite turn higher in recent months. Hospitality spending is up 2.8% year-on-year, helped along by a 0.5% increase this month.
Durables and Hospitality
Growth in most store-types in the durables category is trending higher, with second-hand stores achieving the highest annual growth in this category. This could be due to cost-conscious households or a trend towards buying second-hand items. ‘Birthday presents’ like musical instruments, bicycles, sports goods, and book stores continue to have a tough time, but most did see a lift in seasonally adjusted spend last month.
Apparel and Other Categories
Spending at vape stores is down 7.6% over the last 12 months after years of exponential growth. In the apparel category, spending fell 0.1% in October, which saw the annual change drop "further into the red" at -0.5%. However, within the category, jewellery is a strong outperformer, possibly related to the recent surge in the price of gold.
Conclusion
In conclusion, while card spending is still relatively flat, there are some encouraging signs, particularly in the durables and hospitality sectors. As the economy continues to evolve, it will be interesting to see how these trends play out and whether spending in other categories will start to pick up. Overall, the data suggests that consumers are being cautious with their spending, but there are some areas where they are willing to splurge.
