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Consumers reluctant to spend

By Grace Ormsby · March 18 2020
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egg

Invest

Consumers reluctant to spend

By Grace Ormsby
March 18 2020
Reading:
egg
Consumers reluctant to spend

Consumers reluctant to spend

author image
By Grace Ormsby · March 18 2020
Reading:
egg
Consumers reluctant to spend

It’s been a tough start to 2020, with coronavirus and bushfires both shouldering the blame for a sharp decline in consumer travel and education-spending intentions.

According to the Commonwealth Bank’s chief economist Michael Blythe, both saw further declines in February after dipping in January.

The information comes from the CBA’s Household Spending Intentions series. 

“Along with tourism, the education sector is particularly exposed to the negative effects of the coronavirus,” he said.

“That exposure is now showing up as a sharp downgrade to education-spending intentions.”

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“The emerging consensus is that the bushfires probably knocked 0.2 percentage points off economic growth over Q4 2019 and Q1 2020, and the virus could take a further 0.5 percentage points out of Q1 2020,” the chief economist considered.

He added that the consensus is also that the sectors most affected by these natural disasters are tourism and international education, with both accounting for 5 per cent of Australia’s GDP.

They also account for 7 per cent of total employment.

In addition, the economist flagged that “retail spending intentions remain at low levels, while health and fitness spending intentions and entertainment spending intentions are both now also weakening”.

Despite the slackening spending intentions, Mr Blythe did note that home buying spending intentions remain “near the top” of the historical range, and motor vehicle-spending intention continues its upward trend. 

Want to read more on the economic impacts of coronavirus? Check out nestegg's most up to date information here

Consumers reluctant to spend
Consumers reluctant to spend
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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

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