Invest
Construction sector flourishes prior to government announcement
Australia is set for a two-speed recovery, with consumers swapping their local pubs for tools prior to the Morrison government’s announcement of the HomeBuilder stimulus, consumer spending data has shown.
Construction sector flourishes prior to government announcement
Australia is set for a two-speed recovery, with consumers swapping their local pubs for tools prior to the Morrison government’s announcement of the HomeBuilder stimulus, consumer spending data has shown.
Under the Morrison scheme, eligible property owners could receive $25,000 in government support if they are completing a renovation project between $125,000-$750,000.
However, analysis from Zip on its 1.8 million users showed that Australians began renovating their homes in May, well before the government’s package was announced.
“We have been particularly interested in the bolstering of spend in the past quarter on building and renovation, which is interesting in light of the recent government stimulus package,” Zip co-founder Peter Gray said.
The data revealed a 133 per cent increase in security and safety system installation, while spending on trade services was up 30 per cent.
“Security installation, roofing, gardening, outdoor home improvement and home pools and spas all saw significant increases in consumer spending in May 2020, while trade services like electricians, plumbers and painters were all sought after,” Zip’s report noted.
While many of these jobs might not have been large enough to qualify for the government’s $125,000 scheme, research by Zip showed the industry was well supported prior to government intervention.
The reopening of beaches was also a major win for surf schools as Australians looking for a new hobby spent 102 per cent more on surf schools.
“As beaches began to open, first for exercise, and then later in the month for leisure, goods and services related to the beach saw spikes in spend. Surf schools were uncharacteristically popular during the coldest months of autumn, with consumers spending double what they usually would during May in 2020 compared to 2019,” Zip said.
Gyms, fitness centres, pubs, bars and taxis are all the most heavily impacted sectors, according to the research.
The hospitality industry has been left to struggle due to lockdown measures.
“Forced to pivot significantly during May, spending in pubs and bars, cafes and restaurants remains significantly lower than seasonal averages. While adaptive models have helped reclaim some of the lost revenue, the gap won’t be closed until lockdown measures are completely pulled back,” Zip’s research has shown.
While restaurants (down 19 per cent) and cafes (down 39 per cent) saw some resurgence in May 2020 (compared with April 2020, down 38 per cent and 53 per cent, respectively), spending at pubs and bars in May 2020 (down 74 per cent) remained at similarly low levels to April 2020 (down 79 per cent), the report concluded.
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