Retail spending is on the cusp of improving, with the latest Commonwealth Bank Household Spending Intentions report signalling a boost to every sector – apart from motor vehicles.
The improvement is due to a combination of income tax refunds and a stronger housing market.
According to the report, Australians are intending on spending more in the months ahead, with the average value cash influx into CBA accounts rising 40 per cent above “normal” levels during July and August, largely a result of higher tax returns.
“The refunds are not surprising, but the rate of inflow suggests that many households have moved early to secure their refunds,” CBA chief economist Michael Blythe said.
“The boost to household spending power is larger and coming through sooner than originally expected. The better news is that this tax refund seems set to flow through the consumer spending.
“The upward trend that we have seen in retail spending intentions is a positive signal.”
The report will come as welcome news to the retail industry, with National Australia Bank’s index of business confidence recently stating conditions in the industry have remained particularly weak.
“Transport & utilities and retail are both well below average, and the weakest across all industries,” NAB chief economist Alan Oster said.
“While conditions are still positive, they have been below average for some time and point to a significant loss of momentum in private demand.”
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