NAB Economics Data Insights – week ending 2 October 2021
Encouraging news on the data front this 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
- This week brings encouraging news on the data front. We have seen substantial upward revisions in last week’s disappointing data, with this week broadly maintaining that level. Overall consumption is now up around 6% since the start of 2021, although in the same period in 2019, consumption was up around 18% – so data clearly remains weak. However, a few weeks ago, consumption was down almost 20%, so we have clearly seen an uptick.
- Retail is now approaching the seasonality levels of 2019 for the first time since late June, with strength most evident in electrical and furnishings. Major challenges remain in hospitality, reflecting ongoing lockdowns in half the country, but travel-agents have seen some improvement (potentially post-lockdown bookings or international travel, with restrictions on the latter relaxing later this year).
- On a state basis, we continue to see lockdown areas recovering, particularly in Victoria and NSW. The ACT is also recovering, but from a particularly low base. NSW begins reopening on Monday, the ACT in a week and Victoria in three weeks’ time (or just under). This will see a rebound in hospitality spending, although the phased reopening in the ACT and Victoria will see lower hospitality caps in the initial weeks.
- Our inward credits data was also quite strong last week and is approaching 2019 seasonality levels. This follows some weakness recently. We are seeing a similar trend for SMEs, although will need some time to confirm this beyond seasonality. Construction and agriculture have improved, likely reflecting a reopening in NSW and (more recently) Victoria for construction, along with a very strong season and good commodity prices for agriculture. Education and hospitality continue to struggle and while retail is better, it continues to lag somewhat.
For further details please see NAB Data Insights (week ending 2 October 2021)