Will Australia’s recession be over before it started?
Life is starting to get back to normal, the lockdowns are lifting, there are people in the streets, in fact I went back to one of our favourite café’s on the weekend.
ANZ bank research show that signs continue to indicate that Australians want to get back to normal.
People are out and about, booking restaurants and looking for places to visit and searching AibBNB.
They are also searching for cars to buy and thinking about home renovation.
There were further encouraging signs that the labour market has not deteriorated materially further.
ANZ found Internet searches for “unemployment benefits” have largely returned to normal, and searches for “cancel centrelink” are still elevated after spiking in early May.
In fact, recently the OECD reported that Australia may effectively be leading the developed world out of recession, although there will be a heavy dependence on the government continuing to spend and support the economy so we don’t fall off that cliff everyone seems to be worried about.
And we’re spending more.
ANZ Bank data suggests Australians are dining, driving and beautifying.
In the week to 6 June, total ANZ-observed spending was up 4.3% year on year’
As lockdowns ease across Australia, ANZ-observed spending is drifting up in the categories of travel and dining.
ANZ-observed retail spending growth hit 19.8% y/y for the week to 6 June.
Household goods growth is slowing a little, but is still growing more than other retail categories.
In the home-related goods category, electronics and furniture are the highest growth performers, with both at 53% y/y for week to 6 June.
This is a peak so far for furniture, but the lowest growth result for electronics since mid-April.
Fashion and dining-takeaway are still slightly detracting from ANZ-observed retail spending growth (−8% and −9% y/y for week to 6 June respectively), but are much closer to normal than they were in the first week of May (−33% y/y for dining-takeaway; −35% y/y for fashion).
Beauty spending is now higher than last year.
The petrol, car hire and other transport spending category is also better than it was a month ago.
In movement of a more personal nature, fitness equipment spending is up 52% y/y, a new peak so far.
ANZ-observed charity spending is down 2.4% y/y for the week to 6 June, but is closer to last year’s spend compared to April.
Income disruptions and the overhang of bushfire spending makes y/y growth in charity spending challenging.
Spending growth is weaker in tourism-exposed east coast states (NSW, Vic, Qld) compared to smaller states (SA, WA and Tas).
Increased use of cards over cash may have inflated the spending growth captured by ANZ-observed spending.
State by state spending: tourism states underperform
ANZ-observed spending in the larger, more tourism-exposed states are not growing as fast as smaller states.
Victoria is once again the lowest-performer, reflecting its stricter lockdowns.
Western Australia and Tasmania have seen the strongest total ANZ-observed spending growth for the week ending 7 June.
Western Australia has the most advanced dining-takeaway recovery, while Victoria is still down 45% y/y for the week ending 7 June.
Movement spending differs by state
Movement spending differs by state, reflecting different lockdown conditions.
Car hire is closest to normal in Western Australia (−29% y/y for week to 6 June) and furthest from normal in Tasmania (-79% y/y).
Accommodation is recovering best in South Australia (−22% y/y), while the south east (NSW, Vic, Tas) are around 56–58% y/y and Queensland is −62% y/y (see charts below).
Source: ANZ Bank – this is not personal advice and was written prepared by ANZ bank for its institutional and private banking clients.
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