Stronger spending intentions on COVID-hit sectors reflect broad economic recovery and base effects, according to combined CommBank and Google data for March.
Australian households’ spending intentions for travel, entertainment and home-buying jumped in March 2021 as the economy extended its recovery from the COVID pandemic, the Commonwealth Bank Household Spending Intentions (HSI) series showed. The March rebound also reflected the increase in spending relative to the start of the COVID-19 period in March 2020.
The HSI series offers a forward-looking view by analysing actual customer behaviour from CommBank’s transactions data, along with household spending search activity from Google Trends. The HSI covers around 55 per cent of Australia’s total consumer spend across seven categories: home buying, retail, travel, education, entertainment, motor vehicles, and health and fitness.
According to the HSI, travel spending intentions posted the strongest year-on-year improvement among all seven categories in CommBank’s Household Spending Intensions series. For the year to March, there was a strong increase in spending intentions for destinations such as amusement parks and aquariums, as well as accommodation such as hotels, motels, resorts and motor home and RV rentals.
Home buying intentions also set a new series high in March as both home loan applications and Google searches increased again.
Retail sector growth stabilises
Despite stronger overall spending intentions compared to March 2020, spending intentions on retail slowed. While the retail sector had been a standout in March 2020, as actual spending and spending intentions surged during the early stages of the pandemic, retail spending and spending intentions growth had stabilised in recent months.
“Retail sales were the outperformer last year as everybody rushed to the shops to buy their canned goods and toilet paper, so the comparisons to last year underplay the strength of the sector and the continued economic rebound,” CommBank Chief Economist Stephen Halmarick said.
Retail sector snapshot:
- The year to March 2021 saw a wide range of spending patterns across different sectors of the market. Relative to March last year, strong increases were seen in spending on clothing & footwear, department stores, furniture and home equipment stores, hardware stores, jewellery & watch stores, luggage & leather goods, beauty stores & barbers, cosmetic stores, health spas, digital apps, electronic stores and florists.
- Some major categories, however, saw declines in the year to March, as spending returned to pre-pandemic levels, including: grocery stores & supermarkets, duty free stores, pharmacies and stationary & office supplies.
CommBank is dedicated to supporting Australian retailers to achieve their vision.
A new source of insights for consumer-facing businesses
How well did consumer-facing businesses adapt during the pandemic and how have consumers changed? Our inaugural Consumer Insights report, launching on 24 May, explores the answers.
To receive a copy of the report, register your interest here.
Disclaimer: Important information: This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You should consider seeking independent financial advice before making any decision based on this information. The information in this article and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its publication but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this article. All statements in this article are based on CommBank Household Spending Intentions series. Commonwealth Bank of Australia ABN 48 123 123 124. AFSL and Australian Credit Licence 234945. Full disclosures and disclaimers.