You’ll need to update your browser so you can continue to log on to your online banking from 28th February. Update now.

Close

Article

CommBank’s card spending data shows levelling out

CommBank’s card spending data shows levelling out

The following article has been developed by the Global Economic & Markets Research team.

Household spending hasn’t responded immediately to the gradual easing of restrictions in the past week or so.

  • CommBank’s credit and debit card spend data for the week ending 29 May 2020 indicates spending sits 3% higher than a year ago, compared with a 4% improvement in the week that ended 22 May.
  • Spending is still running below where it was in early January before coronavirus hit.
  • New data on household cash withdrawals shows the demand for cash in April was 35% below last year’s levels.

Analysis from CommBank’s credit and debit card spend data to 29 May 2020 shows the improvement in spending seen in May has levelled out, so the easing of restrictions in the past week or so hasn’t yet driven further momentum in spending.

Restrictions were eased again as of 1 June, so the next two weeks of data warrant close watching to see if households are confident moving around more by eating out, going to beauty salons and spending more on recreation items. Spending growth continues to run below the levels in early January before coronavirus hit.

Sharp fall in demand for cash

We previously explained that the annual growth rate in credit/debit card spending was being enhanced by the fact many stores are no longer accepting cash due to coronavirus. Additionally, shutdown and social distancing measures also affect the ability to use cash.

Analysis of household cash withdrawals from CBA personal accounts – cash withdrawals made at ATMs, EFTPOS cash outs and branch withdrawals under $2,000 – show the annual change in the value of withdrawals fell in March and again in April, to sit 35% below last year’s levels.

Spending on goods versus services

Momentum on goods spending slipped slightly in the week ending 29 May, while services spend improved a little as the easing of restrictions helped the services economy a little more. For example, some states are slowly lifting restrictions on dining in, beauty salons are operational in NSW and Victoria, and Queensland permits intrastate travel.

The services component (eating out) of food spending has continued to improve but remains below last year’s levels. Spending on alcohol consumed outside the home isn’t showing much improvement yet and may take time to recover given the slow easing of restrictions on the number of patrons allowed in pubs and licensed clubs. It also depends on how many people feel comfortable returning to these venues.

Spending in selected categories

Download infographic

Elective surgery has resumed which will support the recovery in spending on medical care. Fear of not catching the virus will also help people seek normal medical care and returning to doctors’ surgeries should see more normal consumption of medical care compared with mid-April.

With schools returning to more normal operations, the numbers on public transport are rising. However, transport spending may take a little longer to return to more normal levels due to government social distancing orders and work from home measures remaining in place.

Household furnishings and equipment spend has started to ease from its elevated levels.

 

Why is this information helpful?

CommBank’s weekly credit and debit card spend data gives you an up-to-date picture of what people are spending their money on and how this is changing as coronavirus continues to impact our world and the economy.

We’ll be providing further updates to help you understand the impact that the virus is having on businesses and the broader economy.

Note: Weekly CBA household credit and debit card spend data is derived from transaction authorisations to give a near real-time view. This means that cancelled authorisations, refunds, reversals, etc. will not be included. Data has not been adjusted for effects of consumers substituting between cash and card payments. 

 

Source: Commonwealth Bank of Australia, Global Economic & Markets Research report “CBA Card Spend – ending 29 May 2020”, published 2 June 2020, author Belinda Allen. Full Global Economic & Markets Research disclaimers can be found at www.commbankresearch.com.au.

Disclaimer IMPORTANT INFORMATION AND DISCLAIMER This report provides general market-related information, and is not intended to be an investment research report. This report has been prepared without taking into account your objectives, financial situation (including the capacity to bear loss), knowledge, experience or needs. It is not to be construed as a solicitation or an offer to buy or sell any securities or financial instruments, or as a recommendation and/or investment advice. Before acting on the information in this report, you should consider the appropriateness and suitability of the information to your own objectives, financial situation and needs, and, if necessary seek appropriate professional or financial advice, including tax and legal advice. Commonwealth Bank of Australia (the “Bank”) believes that the information in this report is correct and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its compilation, but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made in this report. Any opinions, conclusions or recommendations set forth in this report are subject to change without notice and may differ or be contrary to the opinions, conclusions or recommendations expressed elsewhere by the Bank or any member of the Commonwealth Bank of Australia group of companies. Any valuations, projections and forecasts contained are based on a number of assumptions and estimates and are subject to contingencies and uncertainties. Different assumptions and estimates could result in materially different results. The Bank does not represent or warrant that any of these valuations, projections or forecasts, or any of the underlying assumptions or estimates, will be met. Past performance is not a reliable indicator of future performance. Where ‘CBA data’ is cited, this refers to the Bank proprietary data that is sourced from the Bank’s internal systems and may include, but not be limited to, credit card transaction data, merchant facility transaction data and applications for credit. The Bank takes reasonable steps to ensure that its proprietary data used is accurate and any opinions, conclusions or recommendations are reasonably held or made as at the time of compilation of this report. As the statistics take into account only the Bank’s data, no representation or warranty is made as to the completeness of the data and it may not reflect all trends in the market. All customer data used, or represented, in this report is anonymised and aggregated before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy Statement. The CBA Spotlight Series does not contain any recommendations but provides commentary on Australian macroeconomic themes. As the CBA Spotlight reports are based on CBA Data, the IB&M Portfolio & Client Analytics (PCA) team provide raw data that may directly or indirectly relate to the themes that have been selected for coverage by the Chief Economist. The PCA team are subject to the same personal conflict requirements and trading restrictions as research, and individuals are wall-crossed per report. CBA Spotlight reports may be viewed in advance of publication by CBA Marketing and Communications in order to produce infographics. Reports are only provided to Marketing and Communications team members under strict wallcrossing and during this period their individual trading is monitored. We are under no obligation to, and do not, update or keep current the information contained in this report. Neither the Bank nor any of its affiliates or subsidiaries accepts liability for any loss or damage arising out of the use of all or any part of this report. All material presented in this report, unless specifically indicated otherwise, is under copyright of the Bank. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior written permission of the Bank. In the case of certain products, the Bank or one of its related bodies corporate is or may be the only market maker. Financial markets products have an element of risk. The level of risk varies depending on a product’s specific attributes and how it is used. The Bank will enter into transactions on the understanding that the customer has: made his/her own independent decision to enter into the transaction; determined that the transaction is appropriate; ensured he/she has the knowledge to evaluate and capacity to accept the terms, conditions and risks; and is not relying on any communication (including this report) from the Bank as advice. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or that would subject any entity within the Commonwealth Bank group of companies to any registration or licensing requirement within such jurisdiction. Unless agreed separately, we do not charge any fees for any information provided in this report. You may be charged fees in relation to the financial products or other services the Bank provides, these are set out in the relevant Financial Services Guide (“FSG”), relevant “PDS”, relevant Terms & Conditions, and/or relevant contract. If you have a complaint, the Bank’s dispute resolution process can be accessed on 13 22 21 when in Australia, and +61 2 9841 7000 from overseas. Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and its subsidiaries, including Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec), Commonwealth Australia Securities LLC and CBA Europe Ltd., are domestic or foreign entities. Global Markets Research is a business division of the Commonwealth Bank group of companies.