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Economy set to benefit from retail boost
The Australian economy is predicted to get a much-needed boost through the retail sector, with income tax refunds and improved housing market pushing consumers towards spending.
Economy set to benefit from retail boost
The Australian economy is predicted to get a much-needed boost through the retail sector, with income tax refunds and improved housing market pushing consumers towards spending.
The latest data from the Commonwealth Bank Household Spending Intentions series shows positive signals for the Australian economy, with spending intentions holding at “respectable” levels or moving higher in every sector covered, except for motor vehicles.
The bank’s chief economist, Michael Blythe, has also identified spending intentions as improving.
“Significantly, the home buying spending intentions series has moved back into positive territory and this should help drive a further improvement in retail spending intentions in the months ahead,” Mr Blythe said.
According to Commbank’s analysis:
Retail spending – The lift in retail spending intention has moved back into positive territory, with consumers looking to spend their tax refunds.
Travel spending intention – The lift in travel spending intentions suggests the tax refund boost and the turn in the housing market will impact positively on broader consumer spending trends.
Home buying spending intention – Investors are looking to get back into the market with buying intentions accelerating. The household spending intention is at the upper end of a historic range with improving house prices.
Education spending intention – Education spending–related intentions appear unchanged and have carried through strong momentum into the latest period.
Entertainment spending intention – As with the lift in travel spending intention, the improvement in entertainment spending is being triggered by the tax refund and improving housing market more broadly.
Motor vehicle spending intention – The motor vehicle spending intention remains subdued, with vehicle spending proving particularly susceptible to the negative wealth effect from earlier falls in dwelling prices.
Health and fitness spending intention – Health and fitness spending intentions remain largely unchanged, with the household spending intention remaining at average levels.
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