NAB Economics Data Insights – week ending 12 June 2021
The weakness in consumption spending continued last week.
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 weakness in consumption spending continued last week, marking an ongoing trend in recent months. In Index terms (using January 2019 as a base), the overall series stood at 120.2 in the week ending 12 June, above where it was 52 weeks prior (117.1). To get some idea of seasonality, we also use an annual base reset method. On this basis, the overall index stood at 96.9 last week, i.e. below the start of the year. In 2019 (the last “normal” year) the index stood at 112.7 in the same week, showing that the softness in consumption this year is unlikely to be explained by seasonal factors.
- On the same basis (annual base reset), retail trade (94.1) deteriorated from a week prior (revised up 95.6, was 92.3). In the same period in 2019 retail stood at 104.3. The news was a little better for hospitality (85.0 compared to 82.2 a week prior) but remains slightly below the same week in 2019 (87.0).
- Importantly, this weakening consumption trend is not solely a function of the Victorian lockdown. While Victoria saw the weakest conditions overall, last week saw a small uptick, despite all but two days of the period being in lockdown. All other states except the Northern Territory saw consumption weaken last week (based on a 2019 base index). While Victorian restrictions have eased, it is likely to take some weeks before state returns to pre-outbreak “normal”. Importantly, Australia will remain susceptible to similar events until vaccinations are much higher.
- Our inward credits data fell last week, although this may be partly attributable to seasonal factors. Using an annual base reset, the overall index stood at 97.7 for week ending 12 June 2021, while the same week in 2019 was 100.4. On the same basis, retail stood at 79.3 last week, compared to 104 in the same week in 2019. Hospitality stood at 82.3, compared to 92.3 in the same week in 2019.
For further details please see NAB Data Insights week ending (12 June 2021)