NAB Economics Data Insights – week ending 4 September 2021
This week’s consumption data results give us some cautious optimism for Q4.
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
- While New South Wales, metropolitan Melbourne and the ACT remain in lockdown (regional Victoria, excluding Shepparton, will emerge from lockdown tomorrow), this week’s consumption data presents the most encouraging picture for some time. While there are clearly still major challenges, with Melbourne and Sydney to remain in lockdown until they hit vaccination targets (likely in October or beyond), these results give us some cautious optimism for Q4.
- Compared to the start of 2021, consumption has now picked up to 99.4 – i.e. just below the start of the year. In 2019 (the last comparatively more “normal” year), consumption was up 19.1% in the same week, compared to the start of that year. While consumption is clearly still soft, the uptick last week was welcome and unexpected. Retail was down 2.5% since the start of the year last week, but the week prior was down 6.4%.
- Hospitality is down just over 30% since the start of the year (compared to being down 5.2% in the same week in 2019), clearly reflecting ongoing lockdowns and border closures. However, there was a slight uptick from the week prior.
- State level data unsurprisingly shows ongoing weakness in Victoria and New South Wales, although there are some signs this is bottoming out. The ACT is in a much weaker position, reflecting a very strict lockdown. In index terms (with a 2019 base), the ACT remained the weakest (97), although up on the week prior. New South Wales was up to (118) – its best result in a month, while Victoria stood at 116. Queensland continued to recover after a slow start after its earlier lockdown. Queensland, Western Australia, South Australia, Tasmania and the Northern Territory, all stood between 132 and 136 index points last week.
- Inward credits data continues to show more resilience than consumption, posting a strong result last week. although with weakness in hospitality persists. The index stood at 137.1 in the week ending 4 September (annual base reset), compared to 121.3 in the same week in 2019. There are however esoteric “end of month” factors at play. Adjusting for these puts the index in the same position as 2019.
For further details please see NAB Data Insights (week ending 4 September 2021)