Card spending showed solid growth leading into Melbourne shutdown

The latest card spending data from CommBank and NAB have revealed a solid increase in retail spending in the first week of July, compared to the same time last year.

CommBank’s analysis of household credit and debit card spend for the week ending July 3 shows a 12 per cent jump from the same time last year, with spending on household goods and furnishings a whopping 51 per cent higher than the same time last year.

NAB’s spending data shows a 20.9 per cent year-on-year increase in retail spending for the week ending July 4, led by motor vehicles and parts and other store based retailing.

The data from CommBank and NAB include both in-store and online spending.

While both reports break down spending data by state and territory, only CommBank’s data reflects the rise in coronavirus cases in Victoria through the end of June and early July, which forced the state to reinstate stage 3 restrictions on July 8.

According to CommBank’s data, spending growth was slowest in Victoria in the week ending July 3, when some postcodes and public housing towers in Melbourne were in lockdown.

Growth in spending has been strongest in Tasmania, closely followed by Western Australia, Queensland and South Australia.

CommBank’s report also notes that annual growth rates may appear bigger than they actually are due to the decline of cash usage and shift to card spend in recent months.

According to NAB, business conditions have improved from their low-point in March, but remain deeply negative.

The bank’s monthly business survey shows a 10-point improvement in conditions in May, to -24 index points, driven by a 13-point improvement in trading conditions and a 16-point improvement in profitability. Employment saw a more marginal increase.

The industries with the biggest improvement in business conditions in May were manufacturing, construction, retail and recreation & personal, while the services sectors remain notably weaker than the other industries.

Business confidence also rebounded 25 points to -20 index points in May, although it remains at a level last seen in the 1990s recession. Retail is also among the least pessimistic industries, alongside wholesale.

The weak level of confidence combined with historically low levels of forward orders and capacity utilisation suggest business conditions will not return to positive territory in the near term, NAB said.

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