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Consumers’ intent to spend rises despite COVID restrictions
Australians’ intentions to spend have increased during July, despite lockdowns and border restrictions slowing down consumer spending, new research has shown.
Consumers’ intent to spend rises despite COVID restrictions
Australians’ intentions to spend have increased during July, despite lockdowns and border restrictions slowing down consumer spending, new research has shown.
Commonwealth Bank’s Household Spending Intention Report (HSI) has revealed that Australians are continuing to change their spending habits as the COVID-19 pandemic changes daily life.
CBA chief economist Stephen Halmarick said: “Prior to the imposition of the stage 4 restrictions in greater Melbourne, the Commonwealth Bank HSI series data to end of July 2020 showed solid improvement in the majority of spending categories.”
While the Commonwealth Bank HSI series is a good indicator of prospective spending trends, Mr Halmarick pointed out that changing behaviours due to Victoria’s lockdown will change consumers’ spending behaviours.
“Although the introduction of stage 3 restrictions in Melbourne and Mitchell Shire in early July were not enough to stall further improvement in home buying, retail, travel, entertainment and education spending intentions in July, household spending has significantly weakened in Victoria since the stage 4 restrictions were imposed on 2 August.”
Home buying spending intentions improved further in July – and were almost back to the highs seen in late 2019.
The improvement was driven by the retail sector, with increased spending on food, general retail (including department and discount stores) and household furniture and equipment.
“However the tighter restrictions imposed in Victoria, border closures, and the anticipated drop in the population growth rate are a clear source of downside risk to home buying,” Mr Halmarick said.
Some categories saw spending intentions fall in July. Australians who are remaining in lockdown appear to be avoiding health-related expenses.
“Health and fitness spending intentions continued to decline, with the largest source of weakness in commercial and professional sports clubs and sports promoters. While motor vehicles spending intentions are moving sideways,” Mr Halmarick said.
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