Businesses to be cautiously optimistic as consumer confidence returns

There are a few positives to take out of this. Firstly, the data suggests that spending momentum is improving from the low point it hit in mid-April. That could mean consumer confidence is returning as we begin to emerge from the worst weeks of the COVID-19 pandemic. 

Secondly, online spending on retail items has increased 110% compared to the same period last year. While restrictions may have kept consumers well away from bricks-and-mortar retail and hospitality outlets through the outbreak, the increase in online spending suggests many consumers are embracing a switch to e-commerce.

But perhaps the best news here is that this CBA data was collected prior to any easing in COVID-19 restrictions. This could suggest the recent easing of some restrictions may show even better results in the next report.

Also, with the JobKeeper payments kicking in earlier this month and more restrictions to be relaxed soon, we might see a further increase in spending in future rounds of CBA data. 

CBA points out that we are in the very early days of a potential recovery and the data remains volatile at this point. A significant increase in new COVID-19 cases could lead to the return of restrictions, which could wield a second blow to consumer confidence and spending. 

Also, it’s probably no surprise that spending in the fortnight ending 1 May is still significantly down in a range of sectors based on the same period last year. Clothing retailers (down 50%) are among the hardest hit, alongside transport operators (down 30%), recreation venues (down 29%), personal care businesses (down 41%), and medical and healthcare providers (down 16%).