The latest Commonwealth Bank of Australia (CBA) credit and debit card spending analysis from the bank’s Global Economic and Markets Research team indicates spending momentum has improved over the last two weeks but total spending is still well down on a year ago.
The analysis for the fortnight ending Friday, 1 May 2020 shows the improved spending momentum was across a range of goods and services and all states and territories. Importantly, online sales have lifted sharply, particularly for online retail items, which are up by 110% compared to the same period a year earlier.
Head of Australian Economics Gareth Aird said, “Our analysis offers a glimmer of hope that we may be past the lowest point in terms of people spending less. Although people are continuing to spend less, the rate of decline is slowing. It looks to be the case that households have stepped up their rate of expenditure over the second half of April compared with the first half of the month.”
Aird says that while total spending over the fortnight to 1 May is still down by 10% on year ago levels, it is better than the total spending to mid-April, which was down by almost 20% compared to the same time last year.
“Our latest data comes before any easing of restrictions, so it may be that households are feeling more confident to spend at businesses that have not had to shut their doors. It also looks like households have been more eager to get online, click the mouse and fill up the virtual shopping basket,” Aird added.
Although spending is down sharply across most categories, the level of spending growth has improved. Spending is still up strongly on household goods and furniture, up by 35% on the fortnight ending 1 May 2020.
Spending remains down on non-retail goods and services, such as travel, recreation and personal care. The rate of decline for non-retail goods and services, however, has eased over the past fortnight.
Aird explained, “The spending pulse looks to have picked up in all states and territories over the past fortnight. Tasmania is the outperformer with spending down to 2% on year ago levels, New South Wales and Victoria continue to see large falls in spending levels against the other states, with their overall spending down by 10% and 14%, respectively, on the same time last year. Spending in the Australian Capital Territory is now down by 15% over the year.”
“Queensland, Western Australia, South Australia and the Northern Territory have all done better than the national rate,” Aird added.
Re-disseminated by The Asian Banker