- Card spending in NSW only dropped 1.2% on the prior week
- Compares to 21% drop seen in Victoria's most recent lockdown
- This indicates that the type of lockdown matters, and the community response
In today’s news on retail, household credit and debit card spending has been less impacted by current Covid restrictions in NSW than it was during Victoria’s recent lockdown.
According to new data from the Commonwealth Bank of Australia (CBA), card spending in NSW in the week ending 2 July dropped only 1.2% on the prior week. This compares to the 21% fall seen during the first week of Victoria’s most recent lockdown starting 28 May.
Nationwide household credit and debit card spending also remained solid, at 16.5% above 2019 levels and up from 13.9% the previous week, despite four states in various stages of lockdown.
CBA Senior Economist, Belinda Allen, said that the results are surprising and the data indicates that the type of lockdown matters for spending as does the community response.
“The lockdown in Greater Sydney has covered around 70% of the NSW population given the lockdown did not extend to regional NSW.
“The sharpest falls in spending in NSW have been clothing and footwear, general retail, personal care, transport and of course eating and drinking out. Similar to previous lockdowns there was a lift in spend on household furnishings and equipment.”
“Continued easing of restrictions in Vic saw a lift in spending momentum back to pre-lockdown levels, a trend witnessed in past lockdowns. Card spending in Victoria lifted to 20.1% on 2019 levels, the strongest growth since the week ending 21 May.
“The severity of this recent lockdown compared to other states explains the sharper response in card spending and it is encouraging to see spending momentum resume its previous trend.”
Ms Allen’s expectation is that consumer spending will continue to track higher, largely due to low interest rates, a strong labour market, a booming housing market and a decline in the savings rate.
“Recent outbreaks and restrictions will be a headwind for consumer spending, particularly over July with services spend impacted,” Ms Allen concluded.
