NAB Economics Data Insights – week ending 24 July 2021
Consumption is down almost 7% compared to the start of 2021.
NAB Chief Economist, Alan Oster commented
- The emergence of the COVID-19 Delta variant has proven to be a major challenge for Australia. Only Tasmania and the ACT (as well as regional areas of some other states) have been spared from lockdowns over the last two months. Most recently, Victoria and South Australia joined Greater Sydney in lockdown for 12 and 7 days respectively. While Victoria and South Australia emerged from lockdown this week, the Sydney lockdown has been extended a month amid a worsening outbreak.
- These challenges have hit consumption, and not just in in the three recent lockdown states. In index terms (with a 2019 base), Victoria was weakest (107), followed closely by South Australia (109) and New South Wales (112). While the other states were stronger, all states weakened in the week ending 24 July.
- Compared to the start of 2021, consumption is now down almost 7%. In 2019 (the last comparatively more “normal” year), consumption was up 17.7% in the same week, compared to the start of that year. This is clearly a weak result. Retail results are even softer – now down over 10% since the start of the year, while the same period in 2019, retail was up 2.3%.
- Hospitality is down almost 25% since the start of the year (compared to down 2.4% in the same week in 2019), clearly reflecting the hard hit from lockdowns and border closures. With the Sydney lockdown extended another month, further hospitality weakness is essentially locked in.
- Inward credits data slowed last week and is tracking below the same period in 2019 on an annual base reset basis (106.2 vs 113.7). SMEs are underperforming, with the index standing at 92.8 last week vs 109.4 in the same week in 2019. Retail and hospitality are clearly struggling, reflecting lockdown-related challenges.
For further details please see NAB Data Insights (week ending 24 July 2021)