Future outlook enhanced by Google Trends

The October 2019 edition of the Household Spending Intentions (HSI) series showed a disappointing turn back down in Retail Purchase intentions. While there were some positive signs in sectors where the tax refunds now flowing would most likely be spent, the overall picture is one of continued consumer caution. More positively, spending intentions for Entertainment, Education and Motor Vehicles are now pointing up. Importantly, the improvement in Home Buying intentions is holding up – supported by the RBA rate cuts. A positive ‘wealth effect’ from the housing market should help support broader economic growth in the year ahead.

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Knowing what’s around the corner 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.

Home Buying
Spending Intentions

  • Home buying intentions are holding at the high end of the range
  • Dwelling prices are responding and a positive “wealth effect” is emerging
  • A recovery in wealth should normally reinforce the impact of tax rebates and the associated boost to disposable income

Retail
Spending Intentions

  • The lift in retail spending intentions in August was reversed in September
  • A deeper dive into the retail spending data does show some response in those areas where tax rebates are most likely to be spent
  • But the pull back is also potentially a sign that interest rate cuts are less effective – consumers interpret rate cuts from record lows as a sign of economic weakness and keep their wallets shut

Motor Vehicles
Spending Intentions

  • Motor vehicle purchase intentions remain deep in negative territory
  • But spending intentions are slowly edging higher

Entertainment
Spending Intentions

  • Entertainment-related spending intentions are slowly trending higher
  • But, as with travel spending intentions, HSI readings are soft overall

Travel
Spending Intentions

  • The trends in HSI readings relating to the more discretionary spending components seem to be falling into two broad categories at present
  • Spending intentions in areas perceived as more “frivolous”, like travel and entertainment are reasonably soft
  • “Good” spending in areas like health and fitness and education are associated with stronger spending intentions

Education
Spending Intentions

  • The picture for education-related spending intentions has not changed
  • The education HSI retains a solid momentum. And that momentum is lifting

Health and Fitness
Spending Intentions

  • Health and fitness spending intentions are growing at a respectable pace
  • The trends indicate households are willing to allocate scarce disposable income to driving health and fitness spending with little impact from the vagaries of the economic cycle

Enhanced by Google Trends

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