Monthly Household Spending Intentions – January 2021
Each month, analysis by CBA’s Global Economic and Markets Research team provides an early indication of spending trends across seven key household sectors in Australia. In addition to home buying, the series covers around 55 per cent of Australia’s total consumer spend across; retail, travel, education, entertainment, motor vehicles, and health and fitness.
Home Buying Intentions
- After increasing towards the end of 2020, Home Buying spending intentions rose further in January 2021.
- Both home loan applications and Google searches related to home buying were higher in January 2021 (relative to January 2020).
- We continue to expect the Home Buying market to be a key source of support for the Australian economy in 2021 – driven largely by the very low level of interest rates.
- Residential property prices are expected to be up 8% in 2021, with house prices expected to be 9% higher and apartment prices up 5%.
Retail Spending Intentions
- Retail spending intentions were relatively unchanged in January 2021, following on from a similarly flat result in December 2020.
- The year to January 2021 saw strong increases in spending on clothing including uniforms, grocery stores & supermarkets, department stores, discount stores, furniture stores, paint, hardware and household appliance stores, digital apps, electronic stores and pet shops.
- Some weakness was evident in spending on dry cleaners, tailors and, not surprisingly, duty free stores.
Travel Spending Intentions
- Travel spending intentions consolidated solid gains in January 2021, even as the country had to negotiate various out-breaks of Covid-19 and subsequent restrictions on movements in a number of cities.
- For the month of January, Google searches for travel increased noticeably compared with December 2020, while actual spending was a little lower on the month.
- For January 2021 the biggest annual increases in travel related spending were seen in camper, recreational & utility trailer dealers, motor home & recreational vehicle rentals and trailer parks & camp grounds. Weakness is still evident in spending on airlines, cruise ships, timeshares, travel agencies and bus lines.
Health & Fitness spending intentions
- Health and fitness spending intentions picked up marginally in January 2021, with Google searches up on the month even as actual spending was lower.
- Spending activity in the health & fitness space was up in January 2021 vs the previous year in chiropractors, dentists, doctors, ambulance service, medical and health services, nursing & personal care, optometrists, orthopaedic services, osteopaths and podiatrists.
- Spending in the fitness space was up for sporting apparel, bicycle shops & service, sports clubs, golf clubs and sporting goods stores. The main area of weakness remains spending on commercial & professional sporting activities.
Entertainment Spending Intentions
- Entertainment spending intentions rose strongly in January 2021, driven by an increase in Google search activity relative to December 2020.
- Solid increases in spending in January 2021 (relative to January 2020) were seen in on-premise drinking places, off-premise alcohol stores, eating out/restaurants, fast food restaurants, art dealers & galleries, boat rentals, bowling alleys, pay TV, digital books, movies, music & games and music stores.
- Weakness is evident in spending on dance halls, studios & schools, movie theatres, live performance theatres and video amusement game suppliers.
Education Spending Intentions
- Education spending intentions improved in January 2021 as Google searches increased compared with December 2020 and on a small rise in the number of transactions relative to January 2020.
- In terms of transaction volumes, January 2021 saw annual increases in spending only for elementary & secondary schools and school & education services.
- In terms of the value of education transactions, weakness was seen in January 2021 relative to a year before in spending on business & secretarial schools, universities & colleges, correspondence schools, elementary & secondary schools and trade & vocational schools.
Motor Vehicle Spending Intentions
- Motor vehicle spending intentions trended sideways in January 2021, starting the New Year with some moderation in the momentum evident in late 2020. Relative to January 2020, January 2021 saw a decline in Google searches related to motor vehicles and a decline in motor vehicle loan applications. The number of motor vehicle purchases was, however, higher in January 2021 relative to January 2020.
- The improvement in the housing sector should help the outlook for the motor vehicle sector. RBA research has shown that spending on motor vehicles generally has the highest response to changes in property prices. Working against this trend is the increasing shift to work-from-home.
Notes for Editors:
About our monthly Household Spending Intentions series
The HSI series offers a forward-looking view by analysing actual customer behaviour from CBA’s transactions data, along with household search activity from Google Trends.
The approach focuses on Australian households and their spending intentions. Near real-time spending readings from CBA’s household transactions data was combined with relevant search information from Google Trends to map the data results on consumer spending. Households are the dominant part of the economy and drive much of its activity and volatility, and this combination adds to insights on prospective household spending trends in the Australian economy.
Google Trends is a publically available service that enables people to explore search trends around the world. These searches provide insights into what consumers are doing/researching on the Internet and what their spending intentions are.
CBA’s Household Spending Intentions series is published on the third Tuesday of every month. To find out more about the series, visit www.commbank.com.au/spendingintentions.
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