The latest weekly consumer tracking data from NAB shows moderation in spending growth continuing after the EOFY peak, albeit from elevated levels.
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NAB Chief Economist Alan Oster commented
- Our latest weekly consumer tracking data at 13e August shows the moderation in spending growth continuing after the EOFY peak, albeit from elevated levels. Although consumption has outperformed in the pandemic era, apart from significant differences between sectors, it seems that the combination of high inflation, rising rates and weakening confidence have an impact on short-term growth prospects.
- Overall, our seasonally adjusted 4-week moving average consumption metric points to an easing (136.2) for the week ending 13e August 2022, using a 2019 base, compared to the previous week (139.5). However, this remains well above the comparable period of the previous year (117.2). Retail trade (137.4) fell from the previous week (140.7) but remains above year-ago levels (123.2). Hospitality recorded a larger index point change (148.8 vs. 153.8 the previous week), confirming our earlier observation that the sector should continue to ease from the peak in mid-July. Other divisions that have slowed in recent weeks at a faster rate than overall include administrative and support services, arts and recreation services, professional services and transportation.
- While consumption in all states slowed during the week, the largest states, NSW and VIC continue to perform above the national average (compared to 2019), along with NT and TAS. The decline in performance in recent weeks for Queensland appears to be associated with results in education, transport and retail.
- Incoming business also slowed this week (122.9, against 148.2 the previous week). However, like consumption, overall inflows continue to exceed pre-pandemic levels. Mining, which had been a key driver of strength at the start of the year, has slowed significantly in recent weeks and is now around a similar index position to that seen in 2019. Another previous outperformer , construction, has also slowed in recent weeks, but remains elevated. compared to previous years. Like consumption, admissions to the hotel industry remain high, although they are beginning to decline.
For more details, please see NAB Data Insights (week ending August 13, 2022)