Spending climbs in December despite latest COVID scare

NSW’s targeted approach to managing the state’s latest COVID-19 outbreak prevented a plunge in spending in December, ANZ card spending data shows.

NSW’S targeted and measured approach to managing the latest COVID-19 outbreaks prevented a plunge in spending in December. Picture: Flavio Brancaleone

NSW’s more measured approach to managing Sydney’s COVID-19 outbreak has prevented a collapse in consumer spending, new bank data shows, as residents splurged in December on activities denied to them during the restrictions earlier in the year.

Spending by ANZ cardholders lifted by 6 per cent in ­December from the previous month — a similar result to the 5 per cent increase from November to December in 2018, which is the best comparison given the depressing impact of the bushfires in 2019.

ANZ economist Adelaide Timbrell said “overall, what we are not seeing is a plummet in any kind of spending like we saw in that week when South Australia went into lockdown — or in Victoria” during that height of that state’s strict ­second-wave restrictions.

“NSW’s targeted approach to restrictions is certainly helping to dampen any negative impact we are seeing in spending,” Ms Timbrell said.

“This is an encouraging end to 2020, especially considering the mid-December COVID-19 cluster in Sydney’s northern beaches and the subsequent uncertainty and restrictions.”

Nonetheless, the impact of the northern beaches outbreak was discernible in a much softer increase in spending in NSW of just 2 per cent, versus the 6 per cent gain experienced in the final month of 2018.

Victorian spending increased by just shy of 5 per cent, against 6 per cent two years before.

But the weak growth in spending in NSW and Victoria may not have been all down to the latest outbreak, which hit the news on December 17.

Ms Timbrell said the hugely successful Black Friday sales period in November had pulled forward Christmas shopping, and this impact may have been more pronounced in big cities such as Sydney and Melbourne.

In other states, December proved to be a bumper month for retailers. In Queensland, spending in December jumped by close to 10 per cent, against a 6 per cent lift two years earlier.

After a week-long lockdown in November, monthly spending growth in South Australia was 16 per cent — double the pace of growth for December 2018.

 

The data shows that households were keen to take advantage of the freedom afforded by the easing of restrictions through the year, with spending on entertainment surging by nearly 25 per cent in the month, against the roughly 8 per cent increase recorded in December 2018.

Spending on dining and takeaway climbed by more than 10 per cent, which is close to triple the ­increase from two years ago.

Australians forked out 20 per cent more on accommodation in December, versus a zero per cent monthly lift in 2018. And during a ­period when we are not trad­itionally health conscious, spending on health and fitness climbed by about 3 per cent — whereas in December 2018 it fell by about the same amount.

Ms Timbrell said she interpreted this as a shift back “to a more ‘normal’ balance of goods and services”.

“The rebalancing of spending at the end of 2020 is a signal that consumers are more confident — and able — to spend on socialising, travel and services,” she said.

“As much as the recent outbreak has impacted peoples’ Christmases and their ability to move around Australia, it hasn’t been enough to create a large impact on jobs or households’ financial situations. People are still feeling OK about their finances and there’s a lot to be optimistic about coming into 2021.”