CANBERRA, AAP – Australians look set to spend some of the billions of dollars of savings accumulated during the COVID-19 pandemic in a further sign of the economy recovering after the disruptions of prolonged lockdowns in major states,
The Commonwealth Bank household spending intentions index rose 2.1 per cent during November to 110.3, its highest level since December 2019, and recovering all the lost ground during the pandemic.
CBA chief economist Stephen Halmarick said the index has shown a continued and broad based recovery in consumer spending since the end of lockdowns.
“While we have seen sharp increases in categories like transport and travel, there is still plenty of room for further growth,” he said.
The index posted solid gains in November for spending on transport, up 21.5 per cent, travel rising by 14.7 per cent, retail gaining by 9.6 per cent and household services up 9.4 per cent.
CBA estimates households have accumulated some $240 billion in excess savings during the pandemic, money that is ready to be spent heading into Christmas, Mr Halmarick said.
The index combines an analysis of CBA payments data, loan application information and publicly available search activity through Google Trends.
The report was a further sign of the economy rebounding from the economic contraction in the September quarter.
Figures on Monday showed job advertising jumped by a further 7.4 per cent in November, suggesting the jobless rate will soon return to below five per cent.
“Australia’s economic recovery is well under way with more than 350,000 jobs coming back since the start of September and ANZ job ads rising to their highest level in more than 13 years,” Treasurer Josh Frydenberg said.
Meanwhile, Australia’s services industry is showing signs of stabilising after three months of decline, but has yet to enjoy a rebound after the COVID-19 restrictions stalled activity.
The Australian Industry Group performance of services index rose two points in November to 49.6, bordering on the 50-point mark which separates expansion in the industry from contraction.
“The Australian services sector was broadly stable in November, underachieving relative to expectations of a more convincing recovery after the COVID-19 downturn in recent months,” Ai Group chief executive Innes Willox said.
“Service businesses will be hoping for a stronger rebound in performance over the holiday months.”
The Reserve Bank of Australia will hold its final board meeting of the year on Tuesday, but economists doubt it will reveal too much new, tipping the cash rate to remain at a record low 0.1 per cent.