Household credit and debit card spending has been less impacted by current COVID-19 restrictions in NSW than it was during Victoria's recent lockdown, according to new data from the Commonwealth Bank of Australia (CBA).
Card spending in NSW in the week ending 2 July dropped only 1.2 percentage points on the prior week, compared to the 21 percentage point fall seen during the first week of Victoria's most recent lockdown starting 28 May.
Nationwide household credit and debit card spending also remains solid, tracking 16.5 per cent above 2019 levels and up from 13.9 per cent the previous week, despite four states being in various stages of lockdown.
CBA Senior Economist Belinda Allen said: "This is a pleasing result and it is somewhat surprising that we have not seen more of an impact on spending in NSW. What this data shows is that the type of lockdown matters for spending as does the community response.
"The lockdown in Greater Sydney has covered around 70 per cent of the NSW population given the lockdown did not extend to regional NSW. The sharpest falls in spending in NSW have been clothing and footwear, general retail, personal care, transport and of course eating and drinking out. Similar to previous lockdowns there was a lift in spend on household furnishings and equipment."
"Continued easing of restrictions in Vic saw a lift in spending momentum back to pre-lockdown levels, a trend witnessed in past lockdowns. Card spending in Victoria lifted to 20.1 per cent on 2019 levels, the strongest growth since the week ending 21 May. The severity of this recent lockdown compared to other states explains the sharper response in card spending and it is encouraging to see spending momentum resume its previous trend.
"Our expectation is for consumer spending to continue to track higher this year with spending supported by low interest rates, a strong labour market, a booming housing market and a decline in the savings rate. Recent outbreaks and restrictions will be a headwind for consumer spending, particularly over July with services spend impacted," Ms Allen said.
Other key findings on card spending in week ending 2 July
- The lockdown in NT has had a dramatic impact on spending growth in the state - just 2.0 per cent above 2019 levels compared to 15.1 per cent the week before.
- In WA the lockdown only covered four days of the past week and a little less than 80 per cent of the population and the impact was minimal.
- In QLD the lockdown had no discernible impact on spending momentum with growth of 18.7 per cent above 2019 levels remaining steady on the prior week.
- In SA and TAS, with no lockdown in place, card spending lifted. SA rose to 28.6 per cent (was 18.9 per cent) compared to 2019. In TAS these figures were 32.4 per cent and 22.5 per cent respectively.
- Services spend is hit more heavily than goods spend during lockdowns (food and alcohol)
