Thursday, November 19, 2020
The latest data from the Commonwealth Bank Household Spending Intentions (HSI) series for October shows mixed results across key spending sectors of the economy as the effects of the Victorian shutdown lingered. CBA Chief Economist Stephen Halmarick said that while there has since been positive signs so far for the economy in November – including further easing of monetary policy by the Reserve Bank of Australia, as well as easing of restrictions in Victoria – October’s mixed spending intentions highlight the drag the Victorian shutdowns had on the national economy.
“It is pleasing to see a pick-up in entertainment spending intentions in October, while home buying, retail and travel spending intentions tracked sideways.”
Mr Halmarick said entertainment spending intentions rose in October on the back of a pick-up in spending on fast-food, alcohol purchased to consume off-premises, and recreation activities. “Within the recreation sector good increases were seen in spending on boat rentals, bowling alleys, pay TV, digital books-movies-music & games, music stores and video arcades,” said Mr Halmarick.
The HSI series offers a forward-looking view by analysing actual customer behaviour from CBA’s transactions data, along with household spending search activity from Google Trends. This combination adds to insights on prospective household spending trends in the Australian economy.
Home buying spending intentions in October improved marginally as home loan applications rose, while travel spending intentions were flat – albeit expected to improve as state borders open up.
Mr Halmarick confirmed that some weakness was evident in health & fitness, education and motor vehicle spending intentions, all led lower by a decline in online search activity.
“Notwithstanding this mixed result, other data points to an improvement in the Australian economy in the early stages of November.
“Spending on CBA credit/debit cards has picked up as the Victorian economy opens up. In addition, low interest rates are encouraging an increase in home loan applications, especially for fixed rate mortgages by owner-occupiers. A stronger housing market should support spending intentions in the months ahead – as should the recent significant easing of monetary policy by the Reserve Bank of Australia,” said Mr Halmarick.
Read the latest Household Spending Intentions report.
You can also read our economic team's latest profile for Gross Domestic Product (GDP).
Monthly Household Spending Intentions – October 2020
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.
Retail Spending Intentions
Travel Spending Intentions
Home Buying Spending Intentions
Education Spending Intentions
Entertainment Spending Intentions
Motor Vehicles Spending Intentions
Health & Fitness Spending Intentions
Notes for Editors:
About our monthly Household Spending Intentions series
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.
The approach focuses on Australian households and their spending intentions. Employing near real-time spending readings from CBA’s household transactions data and combining them with relevant search information from Google Trends was used to map the data results on consumer spending. Households are the dominant part of the economy and drive much of its activity and volatility, and this combination adds to insights on prospective household spending trends in the Australian economy.
Google Trends is a publically available service that enables people to explore search trends around the world. These searches provide insights into what consumers are doing/researching on the Internet and what their spending intentions are.
CBA’s Household Spending Intentions series is published on the third Tuesday of every month. To find out more about the series, visit www.commbank.com.au/spendingintentions.
Disclaimer
The information contained in this media release is published solely for information purposes and provides general market-related information, and is not intended to be an investment research report. This media release has been prepared without taking into account your objectives, financial situation (including the capacity to bear loss), knowledge, experience or needs. Before acting on the information in this media release, you should consider its appropriateness and, if necessary, seek appropriate professional or financial advice, including tax and legal advice. The data used in this media release is a combination of the CBA Data and Google Trends™ data. Google Trends is a trademark of Google LLC. The term ‘CBA Data’ refers to the proprietary data of the Commonwealth Bank of Australia ("the Bank") that is sourced from the Bank’s internal systems and may include, but is not 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 is accurate and that any opinions, conclusions or recommendations are reasonably held, or are made at the time of compilation of this media release. 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 media release is anonymous and aggregated before analysis, and is used and disclosed in accordance with the Bank’s Privacy Policy Statement.
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