Future outlook enhanced by Google Trends

The Commonwealth Bank Household Spending Intentions (HSI) series, data to end February, shows a clear and early impact from the summer bushfires and the economic and policy response to the coronavirus. Building on the declines seen in January, both the Education and Travel intentions series declined sharply in February. Whilst concerning to see, the falls evident in February show the value in the HSI indicating turning points in the economy early. More positively, the Home Buying spending intentions series remained near the top of its historical range, while the Motor Vehicle spending intentions series continues to improve. Retail spending intentions remain at low levels, while Health & Fitness spending intentions and Entertainment spending intentions are both now also weakening.

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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 intentions have levelled out in recent months, although they are holding at the top end of the historical range
  • Lower mortgage rates following the RBA rate cut in March would be expected to support buying intentions
  • HSI readings remain at levels pointing to further gains in dwelling prices, a turn in the residential construction cycle and a positive wealth effect that should help consumer activity

Retail Spending Intentions

Retail spending intentions

  • Retail spending intentions remain soft
  • The weakness is no doubt a disappointment for policy makers given the amount of stimulus directed at households via lower interest rates and tax rebates
  • The fundamental driver is weak income growth. But the bushfires, smoke and coronavirus are all clearly taking a toll

Motor Vehicles Spending Intentions

Motor vehicle spending intentions

  • The HSI readings for motor vehicles showed a distinct turn up in spending intentions late in 2019. And this lift continued in January and February
  • This lift is a sign that the “wealth effect” remains a positive force in consumer activity. Motor vehicle spending is correlated with changes in household wealth

Entertainment Spending Intentions

Entertainment spending intentions

  • The other “experience” segment to show a pull back in spending intentions is entertainment
  • Nevertheless, spending intentions in this segment are still rising

Travel Spending Intentions

Travel spending intentions

  • Travel spending intentions have stepped down sharply in recent months
  • The February travel HSI readings are the lowest since the series began in 2015
  • The key driver is, again, the bushfires and coronavirus

Education Spending Intentions

Education spending intentions

  • Along with tourism, the education sector is particularly exposed to the negative effects of the coronavirus
  • That exposure is now showing up in a sharp downgrade to spending intentions

Health and Fitness Spending Intentions

Health and fitness spending intentions

  • The weaker spending intentions for travel and education may be a reflection of the bushfires and Coronavirus. But there has been a pull back in spending intentions in the “experience” space more broadly
  • The general resilience in spending intentions for health & fitness has taken a hit in recent months

Enhanced by Google Trends

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