Future outlook enhanced by Google Trends

The Commonwealth Bank Household Spending Intentions (HSI) series, data to end August 2020, shows a clear impact of the stage 4 lockdowns in greater Melbourne throughout August. The improvements seen during July in Home Buying, Retail, Travel, Entertainment and Education spending intentions all stalled in August. Health and Fitness spending intentions picked up in August, while Motor vehicle spending intentions continued to edge higher.

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Spending intentions snapshot

New perspectives can keep you one step ahead

Whether you are running a business, a policy maker, an investor or one of Australia’s corporate enterprises - insights on shifting consumer spending intentions are critical in planning for the future. Our Household Spending Intentions series combines our spending data, one of Australia’s largest financial data sources, with Google Trends publically available search activity. By connecting actual spending data to intentional data, our analysis provides an early indication of prospective spending trends across seven key sectors.  This series covers about 55% of the total household spend. Future releases will look to expand our coverage to the  remaining spending components.

Data-driven insights can give your organisation a new perspective and help you keep a step ahead.

Home Buying Spending Intentions

Home buying spending intentions

  • Home buying spending intentions for August retreated from their July highs. While there was a further increase in home loan applications, Google searches related to home buying declined slightly on the month
  • The lockdowns in greater Melbourne and the expected decline in Australia’s population growth rate will likely both weigh on home buying intentions in the months ahead
  • But the RBA’s substantial easing of monetary policy has seen mortgage rates fall to multi-generational lows and we expect these low interest rates to provide support to home buying. We have revised our house price forecasts for a peak-to-trough decline of -6% (previously -10%), but with substantial deviation expected across the capital cities

Retail Spending Intentions

Retail spending intentions

  • Retail spending intentions pulled-back in August, consistent with our high-frequency CBA credit/debit card spending data which clearly showed the impact of the lockdowns in greater Melbourne on household spending
  • The softness in August was most evident in reduced spending on clothing and footwear and a pull-back in general retail and the very strong household furnishings and equipment sector
  • While only accounting for a small fraction of retail spending, it is interesting to see significant strength in spending on pet shops, digital apps, electronic stores and record stores

Motor Vehicles Spending Intentions

Motor vehicle spending intentions

  • Motor vehicle spending intentions picked up in August and are back in positive territory for the first time since the start of the Covid-19 pandemic

Entertainment Spending Intentions

Entertainment spending intentions

  • Entertainment spending intentions pulled-back a little in August, reversing some of the sharp improvement in recent months off the April low
  • Spending intentions were led lower in August by declines in food (eating out and restaurants) and alcohol spending on licensed premises
  • Weakness was also evident in August in spending on massage parlours, art galleries, live music venues, billiards venues, dance studios, movie theatres and musical theatre
  • Some strength in August was seen in spending on take-away alcohol, candy & confectionery, pay TV services, digital books and video games

Travel Spending Intentions

Travel spending intentions

  • The recovery in Travel spending intentions evident in recent months stalled in August, impacted by the restrictions imposed in Victoria
  • Significant weakness remains evident, not surprisingly, in spending intentions for airlines, cruise ships, travel agents, hotels, motels & resorts, bus lines and car rentals. There has been some improvement, however, in spending intentions on aquariums and campervans
  • With international borders to be closed for an extended period, a sustained improvement in travel spending intentions will be reliant on Australians holidaying within Australia and would be supported by an opening up of state borders

Education Spending Intentions

Education spending intentions

  • Education spending intentions were little changed in August, with some softness in spending and in Google searches for the education sector
  • While the number of transactions for spending on colleges and universities was down in August, the value of these transactions was higher. This could have been impacted by timing differences in paying tuition fees during the Covid-19 period. In addition there were modest declines in spending on school services and trade & vocational institutions
  • This softness was partially offset by increased spending on correspondence schools and elementary & secondary schools

Health and Fitness Spending Intentions

Health and fitness spending intentions

  • Health & fitness spending intentions picked up in August. While actual spending was a little lower on the month, Google searches related to health saw an increase
  • Areas of strength in Health & fitness spending remain bicycle shops and service, golf courses and sporting goods stores
  • There was, however, a clear pull-back in August on spending for medical care, ie. doctors, hospitals, medical laboratories and osteopaths

Enhanced by Google Trends

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