Growth, inflation and labour market all easing
Retail conditions in lockdown-affected areas have clearly been challenging for many businesses, but with reopening here, consumers are bouncing back and spending has returned.
Retail conditions in lockdown-affected areas have clearly been challenging for many businesses, but with reopening here, consumers are bouncing back and spending has returned. With NSW, Victoria and the ACT only out of lockdown for part of October, further upside is highly likely in November.
The NAB Monthly Business Survey for October, released yesterday, showed rising business conditions and confidence – the former principally in NSW and the latter principally in Victoria, mirroring the NSW rise in confidence the month prior. Retail, business, finance & property, and personal & recreation services all saw large confidence gains.
How does this impact our broader view for late 2021 and into 2022? Certainly these results suggest ongoing recovery from the pandemic. There are some signs of retail price pressures, but little to suggest a breakout beyond the RBA’s target band at this stage. It remains unclear whether the lockdown-induced online retail surge continues at the expense of bricks and mortar stores. Ultimately this is a compositional question, not a reflection on the strength of overall consumer spending. We will have a better read on these potential trends in coming weeks and months.
For more information, please see the NAB Cashless Retail Sales Index (October 2021)
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