Future outlook enhanced by Google Trends

The Commonwealth Bank Household Spending Intentions (HSI) series data to end October 2020 shows mixed results, as the effects of the Victorian shutdown lingered. It is pleasing to see a pick-up in Entertainment spending intentions, while Home buying, Retail and Travel spending intentions track sideways. Some weakness was evident in Health & fitness, Education and Motor vehicle spending intentions. Notwithstanding this mixed result, other data points to an improvement in the Australian economy in the early stages of November. Spending on CBA credit/debit cards has picked up as the Victorian economy opens up. In addition, low interest rates are encouraging an increase in home loan applications, especially for fixed rate mortgages by owner-occupiers. A stronger housing market should support spending intentions in the months ahead – as should the recent significant easing of monetary policy by the Reserve Bank of Australia.

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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 loan spending intentions improved marginally in October, but have largely been tracking sideways since the sharp recovery from the Covid-19 lows in April
  • Home loan applications have risen meaningfully over recent months, but this has been partly offset by a reduction in Google searches related to home buying
  • The November easing of monetary policy has led to a further reduction in a number of fixed mortgage rates. We expect these (very) low interest rates to continue to provide support to home buying

Retail Spending Intentions

Retail spending intentions

  • While there were some increases in retail spending intentions in the month of October, the annual pace of retail spending intentions continued to soften
  • The impact of the Victorian shutdowns is the main influence and we can see clearly from the CBA credit/debit card data that spending is up sharply in early November as the shutdowns ease
  • October showed improvement in spending on clothing stores, grocery stores and supermarkets, department stores, furniture and household equipment, hardware, school and office supplies, Apps, electronic stores, florists, hobby and toy stores, pet shops and record stores
  • Weakness in October was most evident in men’s clothing, women’s accessories, duty free stores, optical goods and health & beauty spas

Motor Vehicles Spending Intentions

Motor vehicle spending intentions

  • Motor vehicle spending intentions lost further momentum in October. While there was a small increase in new and used car transactions in October, on an annual basis Google searches, transactions and lending for motor vehicles were all lower compared with October 2019
  • Expected improvements in the housing sector should help the outlook for the motor vehicle sector. Generally, spending on motor vehicles has the highest response to changes in property prices according to research done by the RBA

Entertainment Spending Intentions

Entertainment spending intentions

  • Entertainment spending intentions rose in October, led higher by spending in fast food, alcohol purchased to consume off-premise and recreation spending
  • Within the recreation sector good increases were seen in spending on boat rentals, bowling alleys, pay TV, digital books-movies-music & games, music stores and video arcades
  • Weakness is still evident in spending on art dealers & galleries, live music, billiard/pool establishments, dance halls/studios/schools, movie theatres, and live performance theatres

Travel Spending Intentions

Travel spending intentions

  • Travel spending intentions stalled in October, although they remain well off the lows seen in April. In the month, ongoing recovery was seen in visits to aquariums, camper & recreational vehicle dealers and trailer parks/camp grounds
  • Weakness remains evident in key areas such as airlines, amusement parks, hotels, motels & resorts, motor home & recreational vehicle hire, sport & rec camps, cruise lines, timeshare, tourist attractions, travel agents, car rentals and bus lines. We would expect improvement in travel spending as state borders are opened

Education Spending Intentions

Education spending intentions

  • Education spending intentions declined in October. While the number of transactions increased in October, Google searches were lower and the value of transactions were down on an annual basis
  • In value terms, the annual pace of education spending was lower for business and secretarial schools, secondary schools and other educational services
  • Small increases were seen in spending on colleges, universities & professional schools as well as trade & vocational schools

Health and Fitness Spending Intentions

Health and fitness spending intentions

  • Health & fitness spending intentions declined in October, led lower by a decline in Google search activity
  • The annual rate of actual spending on Health & fitness increased in October, with gains seen in sports apparel, chiropractors, dentists, optometrists, osteopaths and podiatrists.  Bicycle shops, sporting goods and golf courses also saw large rises
  • Spending remains soft for ambulances services (which is a good thing) and professional sports clubs

Enhanced by Google Trends

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