Future outlook enhanced by Google Trends

The Commonwealth Bank Household Spending Intentions series shows that the patterns of spending in the Australian economy continues to be impacted by the policies to slow the spread of COVID-19 – with some big changes now evident. Data up to the end of May 2020 showed Retail spending intentions jumped higher on the month, consistent with our Commonwealth Bank credit/debit card spending data. Improvement was also seen in Entertainment spending intentions. After big falls in April, spending intentions stabilised for Home Buying and Travel. Health and Fitness spending also stabilised after recent gains, while some weakness was evident for Education and Motor Vehicle spending intentions.

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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 stabilised in May - driven by an increase in mortgage applications as house prices fell. On-line searches related to home buying decreased in previous months
  • Auction clearance rates have improved, although turnover remains low
  • The RBA’s substantial easing of monetary policy has seen mortgage rates fall to multi-generational lows – especially for fixed rate mortgages. Commonwealth Bank data has shown a large rise in new mortgage applications taking advantage of low fixed rates and this should help provide support to home buying in the future

Retail Spending Intentions

Retail spending intentions

  • Retail spending intentions jumped higher in May. This was consistent with the ongoing improvement in spending evident in the Commonwealth Bank credit/debit card spending data
  • The key drivers for the Retail spending intentions in May were food, general retail (i.e. department and discount stores) and household furnishings and equipment
  • It is also worth noting that a larger share of retail sales is now likely flowing through credit/debit card spending, rather than by cash

Motor Vehicles Spending Intentions

Motor vehicle spending intentions

  • The improvement in Motor Vehicle spending intentions that was evident in the second half of 2019 and into early 2020 has been reversed at the hands of COVID-19
  • Spending intentions for Motor Vehicles declined further in May, with the weakness in the labour market, a turn down in house prices and general economy no doubt having an impact
  • The softness in May was due to both reduced spending in this sector on the month and a downturn in on-line searches for motor vehicle shopping

Entertainment Spending Intentions

Entertainment spending intentions

  • Entertainment spending intentions improved in May – with the key driver being an improvement in ‘recreation’ spending, including on digital books and games and music stores
  • Perhaps adding to COVID-19 ‘waist-lines’ there was also an ongoing increase in spending on both alcohol (for at home consumption) and confectionary
  • Weakness is still evident in alcohol sales at licenced premises, as well as restaurants, art galleries, live music venues, bowling allies, cinemas and theatres

Travel Spending Intentions

Travel spending intentions

  • After collapsing in April as international travel was prohibited and inter-state travel was very difficult, Travel spending intentions stabilised in May as parts of the economy re-opened.  This was especially the case for intra-state travel
  • While Australians may not be able to holiday overseas until well into 2021, domestic tourism is likely to get a significant boost in coming months. Australians will no doubt be keen to visit family and friends around the country and use the opportunity to explore the best that Australia has to offer

Education Spending Intentions

Education spending intentions

  • Education spending intentions were weak in May, with a rise in correspondence schools not enough to offset weakness across the other education sectors
  • Sharp falls were seen in spending intentions for universities, colleges, schools and trade and vocational
  • With schools now back to on-campus learning and with a specific focus on trade and vocational learning as part of the government’s economic recovery plans, the HSI should pick-up some improvement in coming months in this sector

Health and Fitness Spending Intentions

Health and fitness spending intentions

  • After considerable strength in April, Health and Fitness spending intentions stabilised in May
  • The key driver of the small downturn was reduced spending on medical care and health services – such as dentists, doctors, surgeons, hospitals, optometrists and podiatrists
  • Fitness related spending remained solid, especially for bicycle shops and sporting goods stores. With gyms re-opening in mid-June and professional and community sport re-starting, some return to ‘normal’ spending patterns could be expected in this sector over coming months

Enhanced by Google Trends

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