Australian retail spending should get “a good kick along” in October and November, according to the economics group of NAB, releasing the September edition of its Cashless Retail Sales Index.
NAB chief economist Alan Oster says the reopening of NSW, soon to be followed by the ACT tomorrow (Friday) and Melbourne in about a fortnight, should boost retail spending after September sales showed a rebound despite lockdowns suppressing the retail industry and, more acutely, hospitality spending.
“Retail conditions in lockdown-affected areas have clearly been challenging for many businesses, with hospitality hit particularly hard,” said Oster. “However, our data now indicates that lockdown-affected areas are turning a corner.”
He said NAB data suggests consumers have begun to turn a corner, with weekly consumer spending updates showing an uptick over recent weeks.
“It remains unclear whether consumers will ‘snap back’ to the same extent as previous reopenings with the virus circulating in the community this time. However, higher-than-expected vaccination rates (the ACT and NSW are now over 90-per-cent first dose, with Victoria on track to reach this milestone in around a week) should give the reopening real durability.”
On a less positive note, the NAB’s Monthly Business Survey showed that while confidence rebounded in NSW and Victoria ahead of reopenings, actual business conditions fell significantly during the period.
“We expect that reopening will bring an uptick, but how quickly conditions recover will depend on consumer sentiment in the face of ongoing cases.”