NAB Economics Data Insights 25 February 2021
Consumption growth continues to moderate in the latest NAB Data Insights release for the week-ended 20 February 2021.
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- There was a general slowing trend in consumption across most states in the week ending 20 February 2021, although year-on-year growth was still positive (1.8%). Victoria, which experienced a five-day lockdown, saw a contraction in spending which hit the national headline result. However, it is likely to snap back quickly post-restrictions, based on experience from other lockdown events.
- Some sectors continue to clearly outperform others. Home-related spending (household goods, construction, etc.) looks strong, but parts of hospitality remain in real trouble, particularly accommodation, which slid further last week.
- Business inflows have also lost momentum recently, although remain positive overall.
NAB Chief Economist, Alan Oster commented
Consumption growth continues to moderate in the latest NAB Data Insights release for the week-ended 20 February 2021. Retail was 4.8% higher last week, but hospitality (0.0%) was flat. The food side of spending is still growing (9.4% y/y) but has slowed. The biggest challenge for hospitality is the worsening of accommodation (-27.1% last week from -24.3% the week prior). The four-week moving average indicates that overall spend (5.1%) is levelling off at between 4 to 6% growth.
The five-day “circuit breaker” lockdown in Victoria saw a sharp contraction last week, down 6.3% y/y. Previous Australian lockdowns have been followed by rapid snap backs, and we expect the same to occur here. Nonetheless, the lockdown clearly hit the national headline result.
Consumption trends by sector remain a mixed bag. Construction slowed this week (+7.1%) but remained positive, while hospitality was flat. Growth accelerated for arts and recreation (+13.8% weekly y/y), driven by a pick-up in gambling (+59.0%), but all other key sub sectors contracted. The worst performing sector, administration and support services, is clearly still struggling, off 74.7%, with travel agents down -80.9%. Meanwhile, education (+2.8%) returned to growth last week, driven by a moderate increase for school education (5.8%). Health and social services (+3.3%) slowed, driven by considerable slowing in allied health (0.3%). Childcare, pathology/diagnostics, and social assistance contracted.
Rental, hiring and real estate (-5.2%) contracted again, driven by worsening car hire (-28.4%) and goods hire (-5.8%), although real estate services (-2.7%) and property operators (+14.1%), improved on the week prior, albeit with the former still contracting.
Business inflows data remains positive overall, with a six-week rolling average y/y growth rate of 12.2%. Only accommodation and food services contracted, while retail trade saw the strongest growth at 21.3%, followed by Transport, Postal & Warehousing at 15.8%.
JobKeeper is now only having a small impact on business inflows overall, although remains important for some industries. Without JobKeeper, growth was in the order of 11.7% last week, although accommodation and food services is much more dependent on the program, with growth ex-JobKeeper last week of -6.5% rather -3.5%.
For further details please see NAB data insights 20 February 2021 report