Commonwealth Bank (CBA) Household Spending Intentions (HSI) series data for July 2021 clearly shows the impact of lockdowns across Australia, with declines in spending intentions across most categories including home buying, retail, travel, entertainment, education and motor vehicles compared to July 2020.
This is the first time that year on year spending intentions have fallen across most categories since the start of the COVID-19 pandemic. The only exception is health & fitness spending which remains higher over this period, due to elevated spending for doctors, hospitals, medical labs, nursing & personal care, orthopaedic, osteopaths and podiatrists.
While spending intentions for home buying, retail, health & fitness and entertainment remain higher than July 2019 – considered the last ‘normal’ year – spending intentions for travel, education and motor vehicles are, for the first time, down in comparison to that same period.
CBA Chief Economist Stephen Halmarick said rolling lockdowns in many states and the extended lockdown in Greater Sydney had impacted most areas of spending.
“Australia’s economic recovery from last year’s COVID restrictions was impressive, as reflected by the sectors of the economy covered by the HSI series. However, this changed in July and, unfortunately, the spread of the delta variant of the COVID-19 virus has seen a combination of rolling lockdowns used across much of Australia including an extended lockdown in Greater Sydney.
“More recent CBA credit and debit card spending data shows the ongoing impact of lockdowns, with national spending to 13 August flat relative to 2020 and up just 4 per cent against the same week in 2019. This supports our view that the Australian economy will contract by 2.7 per cent/qtr in Q3 21 and a revision of our 2021 GDP growth forecast to 3.6 per cent from 5 per cent.”
About CBA’s monthly Household Spending Intentions series
Each month, analysis by CBA’s Global Economic and Markets Research team provides an early indication of spending trends across seven key household sectors in Australia. In addition to home buying, the series covers around 55 per cent of Australia’s total consumer spend across; retail, travel, education, entertainment, motor vehicles, and health and fitness.
The HSI series offers a forward-looking view by analysing actual customer behaviour from CBA’s transactions data, along with household search activity from Google Trends.