Buyers back as rebound firms up

A BUSY Christmas period has spilled over into the new year, with consumer spending rising during the first week of January despite COVID-19 restrictions suppressing hospitality spending in the eastern states.

Data from NAB Group Economics shows that consumption spending was 4.1 per cent higher in the week to January 9, 2021, than it was the year prior, when bushfires were blanketing the country.

The active week comes after a volatile period where consumption spending increased by 26.4 per cent in the week leading up to Christmas, before falling by 1.1 per cent in the week leading into the new year.

NAB’s group executive for business and private banking Andrew Irvine said spending through the holiday period had increased his confidence in the Australian economy.

“In conversations I’ve had with customers it has been clear that the Christmas period brought a great boost to their trading, particularly for retailers,” he said.

“We are increasingly confident in Australia’s ability to rebound quickly and strongly from COVID-19.

“We are buoyed by the growth experienced by the retail sector, with consumption up 4.1 per cent in the first week of January, and are determined to continue to back our business customers as Australia maintains its economic recovery.”

Spending accelerated the fastest in Australia’s COVIDfree jurisdictions: The Northern Territory saw spending jump by 12.5 per cent, followed by 8.4 per cent in WA.

South Australia booked a 6.5 per cent increase while Victoria and Queensland saw an increase of 4.7 and 4.6 per cent respectively.

NSW saw a modest 1.8 per cent increase as it continued to grapple with a December COVID-19 outbreak, while the ACT saw a 4.6 per cent decline as restrictions on travellers implemented in December remained in effect.

The best-performing sector was the arts and recreation services, which was up 16.4 per cent compared to the previous year, followed by retail trade, which grew 14.1 per cent, supported by strong growth in electrical goods and specialised food and liquor.

Unsurprisingly, administrative and support services, which includes travel agency businesses, was down 72.9 per cent year on year, while education and training was down by 21.9 per cent as international students remain absent.

Hospitality consumption spending was up by 3.9 per cent, but NAB data showed payment inflows into the sector over the past six weeks were down by 4.5 per cent year on year.