NAB Economics Data Insights – week ending 1 May 2021
Encouraging headline results for the week ending 1 May, further underline our view that the Australian economy is recovering well from the pandemic.
In this podcast, NAB Chief Economist, Alan Oster gives you a 10 minute summary of our analysis of consumer spending.
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NAB Chief Economist, Alan Oster commented
- The headline results for the week ending 1 May 2021 continue to be encouraging, further underlining our view that the Australian economy is recovering well from the pandemic. The slowdown that we flagged earlier this year now looks to have stabilised – an encouraging sign for consumption despite low wage growth. Western Australian results took a hit from the snap lockdown but (as has been the case for other short lockdowns), look to be recovering rapidly. While the timing of Easter and end of month make seasonal adjustment difficult, this week’s data clearly provides further support to the idea that consumption has returned to “normal” levels.
- In index terms (2019 base), in the week ending 1 May 2021 the overall series stood at 126.6, above its position 52 weeks prior (+108). In early May 2020, the drop in total consumption had begun to moderate as retail home improvements began to kick in. Using a base reset at the start of the year to get some idea of seasonality, the overall index (102.2) is just above the start of 2021 – up about 2.2% from week one. Compared to the same week in 2019 (100) the index appears flat but the timing of Easter in 2019 makes direct comparison more difficult (retail other than confectionary can be typically quieter at this time), highlighting the challenges of seasonal comparisons of weekly data.
- On the same basis, Retail trade (96) eased from a week prior (revised 101, previously 94), but is still 4% lower than the start of the year. Compared to 2019 (94), over 6% below week 1 of that year, the results are remarkably similar. But again, this week in 2019 included Easter, suggesting some caution. The index for hospitality (95.7) slowed relative to a week prior (revised +99) and is on par with the index value in 2019 (94.8), but well above 2020 (42). Overall, we are encouraged, particularly by the results for hospitality, which endured a very tough 2020.
- Overall, our inward credits data tells a similar story to consumption spending. Using an index format, overall inflows stood at 133 last week, peaking a little earlier than in 2019. However, timing of Easter and end of month considerations are likely to be part of the driver here.
For further details please see NAB data insights (week ending 1 May 2021)