The panic buying that accompanied the start of the COVID-19 lockdown has eased and spending has plummeted by 20 per cent compared with last year’s levels, according to data from the Commonwealth Bank.
And a Westpac consumer confidence survey shows the largest monthly fall on record, with one in five respondents reporting that they had lost their entire income in March.
Despite queues outside bottle shops and purchase restrictions just weeks ago, alcohol purchases have plummeted, along with spending on clothing (down 58 per cent), personal care (down 61 per cent) and transport (down 44 per cent).
The Commonwealth Bank’s analysis of card transactions showed that the March spike in alcohol sales faded quickly.
“Spending on alcohol had been holding up because of the spike in sales at bottle shops,” CBA head of Australian economics Gareth Aird told Business Insider Australia. “But alcohol spend has since rolled over as the unprecedented drop in spending at hotels, pubs and bars far outweighs the lift in sales at bottle shops.”
A 23 per cent lift in sales through bottle shops could not offset a 72 per cent collapse in spending through hotels, pubs and bars.
The analysis showed that “spending on pretty much everything plunged” in the lead-up to the Easter long weekend with lockdown measures in place.
“In the week to 10 April, total credit and debit card spend was down by 20 per cent on year-ago levels,” said Mr Aird. “Spending on goods, which had previously been sitting at above-average levels, has eased to sit just three per cent higher over the year.
“Meanwhile, spending on services has continued to plummet and is now down by 44 per cent over the year.”
Spending on medical services is starting to fall. Household furnishings and equipment are still up 10 per cent on the same time last year, but the huge growth in early March is coming to an end.
Sales of food items, mostly via supermarkets, are up 28 per cent on the same time last year. However, food services, covering restaurants and cafes, were down 38 per cent.
Mr Aird said: “The biggest annual declines in credit and debit card spending are in Victoria and New South Wales. Our two largest states have more exposure to the most heavily impacted services sectors and less exposure to the more insulated sectors [like] agriculture [and] mining.
“In addition, they are more impacted by the abrupt temporary halt in net overseas migration.”
Consumer confidence in the economy suffered its worst monthly fall on record, dropping 31 per cent, according to Westpac’s consumer survey released on Wednesday.
“This is the single biggest monthly decline in the 47-year history of the survey, taking the index beyond GFC (global financial crisis) lows to levels only seen during the deep recessions of the early 1990s and early 1980s,” said Westpac chief economist Bill Evans.
“The details of the survey … are all very disturbing and reflect the large shocks to jobs and spending. However, the most surprising message is the collapse in confidence in the housing market,” he said, adding that had declined to GFC levels.
The survey found that seven per cent of respondents had lost their job in March and another 14 per cent had been stood down without pay.
“This survey result implies that over one in five workers have lost their entire wage income,” Mr Evans said.
However, the Westpac survey showed that the medium-term view allowed cause for optimism.
It said the extreme negative economic outlook was confined to the near term with the “economy next five years” sub-index down just 3.8 per cent in the month. “At 87.0, this sub-index is still comfortably above recent cyclical lows (it averaged 85.5 over the second half of 2014).”
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