A year on from Australia’s Covid-19 initial phase of lockdowns, spending intentions across all seven categories tracked by the Commonwealth Bank Household Spending Intentions (HSI) series showed strong improvement – in a sign the economy advanced its recovery in April.
“This comes as no surprise as we know that April 2020 was the low-point for spending as the first wave of Covid-19 restrictions hit Australians,” said CBA Chief Economist Stephen Halmarick.
“A year later, the economy has recovered strongly from Covid-19 impacts, with employment above pre-pandemic levels and household spending intentions on the rise as consumers once again feel confident about their economic prospects,” Mr Halmarick said.
The brighter economic picture was reflected in the 2021-22 Commonwealth Budget, which projected deficits would decline in the years ahead. Still, significant government spending was announced to support the ongoing recovery.
“The Budget’s targeted support programs aim to put more people into jobs and ensure the economic recovery is widespread,” Mr Halmarick said.
Home buying intentions continued their march higher in April 2021, posting gains on both April 2020 and April 2019. Both home loan applications and Google searches increased in April as the national real estate market attracted prospective buyers.
“We expect the residential property market to be a key source of support for Australia’s economy in 2021, driven largely by the very low level of interest rates,” Mr Halmarick said.
Retail spending intentions posted strong gains in April, sharply recovering from declines recorded in March. Retail spending was stronger this April than both April 2020 and April 2019.
Travel spending intentions skyrocketed in April from a year ago, when almost all travel ceased due to lockdowns and border closures. However, travel spending intentions were lower in April 2021 than April 2019, reflecting the lasting impact of Covid-19 on this sector of the econo
Entertainment spending intentions shot higher in April 2021, eclipsing both April 2020 and 2019. Australian households strongly increased actual spending relative to April 2020 at on-premise drinking places, eating out and restaurants, personal care, movie theatres and live theatre.
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.
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.