Future outlook enhanced by Google Trends

The monthly Commonwealth Bank Household Spending Intentions (HSI) series, data to end-December, confirms the trends of recent months remained in place at the end of 2019. The Home buying intentions series lifted again and is now at a record high. There are some early signs of a ‘wealth effect’ from the housing market supporting spending on Motor vehicles (from a very low level), Travel and Entertainment. But households remain very cautious about spending at the Retail level, with the November ‘Black Friday’ sales adding little in the way of additional spending. Health & Fitness and Education spending have both now turned down – but from relatively high levels.

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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 moved higher again in December and now sit at a record high
  • HSI readings indicate that the pick up in dwelling prices in H2 2019 may continue into H1 2020
  • The turn in the HSI is also a sign that the economic drag from falling residential construction may be nearing an end

Retail
Spending Intentions

  • Retail spending intentions are fluctuating from month to month around an essentially flat trend
  • This flat trend remains a disappointing outcome relative to the stimulus applied via interest rate cuts, tax rebates and the turn up in dwelling prices
  • The zig-zag pattern indicates that the "Black Friday" event shifted spending from December into November without necessarily boosting spending over all

Motor Vehicles
Spending Intentions

  • Buying intentions for motor vehicles remain soft overall
  • But the slow improvement evident in recent months accelerated sharply on the latest readings
  • This outcome is significant because Reserve Bank of Australia (RBA) research has revealed that the form of spending most sensitive to changes in wealth is motor vehicles

Entertainment
Spending Intentions

  • Entertainment spending intentions are improving at a respectable pace
  • This trend follows our earlier analysis about a rising consumer preference for spending on "experiences" as opposed to spending on "stuff"

Travel
Spending Intentions

  • Travel spending intentions continue to trend higher
  • The HSI readings are volatile from month to month. But the pull back in December would match up with other indicators showing the terrible bshfires are having a negative impact on travel intentions
  • Google trends, for example, reveals accommodation searches in fire affected areas on the north and south coast of NSW are falling away

Education
Spending Intentions

  • As with Health & Fitness, Education spending intentions have lost a little momentum in recent months
  • But spending intentions remain at high levels overall

Health and Fitness
Spending Intentions

  • Intentions to spend on health & fitness have moved lower in recent month
  • But the HSI for Health & Fitness spending remains comfortably in positive territory
  • And spending intentions are still growing more strongly than most other parts of consumer spending

Enhanced by Google Trends

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