According to Commonwealth Bank’s monthly household spending intention (HSI), three categories are showing strong signs of increases, being retail spending intention, education, and health and fitness spending intention.
CBA chief economist Stephen Halmarick said the economic shutdown clearly impacted all HSI indicators, with most spending categories experiencing falls.
“In contrast, retail, online learning, and health and fitness spending intentions saw sharp rises as people prepared themselves for an extended shutdown of many parts of the economy,” Mr Halmarick added.
The surge in spending in March for retail was likely related to consumer’s response to the developing COVID-19 shutdown and a jump in spending on supermarket items, alcohol and household equipment and furnishings.
The increase in the health and fitness HSI may be related to spending intentions on medical needs and the desire to create “home gyms” and/or undertake “virtual” personal training activities in the COVID-19 shutdown period, the report also found.
Mr Halmarick said the latest HSI series also highlights how some Aussies are remaining focused on learning new skills online.
“After a large fall in February 2020, education spending intentions increased in March – as online and virtual schooling and higher education began to dominate,” Mr Halmarick said.
Mr Halmarick also pointed out that while lockdown was good for certain industries, it could potentially see losses in the housing sector, which is now predicted to fall by 10 per cent over the next six months.
“Looking at our home buying intentions series in March 2020, people were feeling confident with spending intentions sitting close to all-time record highs. Since then, we have seen turnover in the housing market decline significantly after public open houses and auctions were banned, with rising job insecurity also being a factor,” Mr Halmarick concluded.
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