After what has been a solid month for equities and bond investors, month end flows have probably play their part in the price action overnight, US equities have lost momentum, UST have led a rise in core global bond yields and the USD is stronger. US and European inflation releases favoured the notion the Fed and ECB are done with their respective tightening cycles.
NAB Economics Data Insights, 20 June 2020
NAB’s consumption spending index points to a levelling off in spending.
The key message from our latest Data Insights is the recovery in consumption spending is levelling off, with NAB’s consumption spending index lower than at the same time last year and basically flat since the start of the year (pre-COVID 19). Payment inflows data also continues to slow. Although still mildly positive, the latest read is the slowest this year. The slowdown is particularly evident among Corporates.
- NAB’s consumption spending index points to a levelling off in spending. Over the week ending June 20, consumption spending was just 0.3% higher in 4-week moving average terms than at the start of the year, and 2.7% lower than at the same time last year.
- Relative to the start of 2020, spending is higher in just 5 states, led by the NT and QLD (but the rate of growth rate is tapering off in both states). Spending remains lowest in the ACT (by some margin), WA and VIC (but is improving as restrictions are slowly relaxed). Relative to last year, spending is lower in all states bar the NT and QLD (flat).
- By industry, the recovery in Hospitality spend is continuing, with positive signs in all industry sub-sectors. But spending is still down 31% since the start of the year and among the worst performers, along with Admin & Support (-73%) and Transport, Postage & Warehousing (-43%). Construction (39%), Professional & Tech Services (25%) and Retail (12%) have recorded the highest growth since the start of 2020, but appears to be levelling off in all 3 sectors. Healthcare is among the big improvers, with spend now up some 4% since the start of the year.
- The softening in consumer spend is further evident in the fact that spending growth over the year is now positive in just 13 of 45 industry sub-sectors (16 in our last report) – led by Gambling (105%) and Residential Care Services (38%). Heavy falls are still being reported for Motion Picture & Sound Recording (-95%), Air & Space Transport (-85%), Rail Transport (-80%) and Admin & Support (-77%).
- Payment Inflows into NAB merchants are also slowing, with the latest data showing inflows now just 2.1% higher in year on year terms in the week ending in June 20 – the weakest result this year. Inflows are down most for small firms, but the rate of decline has levelled off in recent weeks, while accelerating for mid-sized firms. Corporates are still positive and out-performing, but inflows are slowing quickly.
- Inflows were strongest into Other Services (34%), Mining (18%), Manufacturing (14%) and Construction (13%), and weakest in Hospitality (-30%), and Transport Postal & Warehousing (-15.9%).
For further details, please see NAB Data Insights 20 June 2020 Report.
During these extraordinary times we have taken the decision to publish aggregated customer data categorised by industry segment with the view to helping provide clarity around which segments of the economy have been most affected by the broader macroeconomic trends at play. NAB takes data privacy very seriously. All customer transaction data has been aggregated and no individual’s data is specifically identified or analysed as part of this process. The data used in this report will not be sold or made publicly available, but insights from the data will be shared with the Australian people.