Source: Commonwealth Bank of Australia
Combined CBA and Google data highlights how spending intentions were mixed across different sectors last month, according to CBA’s Chief Economist.
Tuesday, 17 November 2020 – 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.