Consumer confidence rebounds as vaccination rates climb

Consumer sentiment increased by 2.0% in September 2021, with confidence bouncing back from last month’s 4.4% decline. Retail sales continued their decline in July with a 2.7% fall, while online retail sales remain strong with an increase of 6.4% in July 2021.

Consumer confidence

• 1 month - 2.0%

• 3 months - (0.9%)

• 12 months - 13.2%

Source: Westpac – Melbourne Institute Consumer Sentiment Index

Consumer sentiment rebounded by 2.0% to 106.2 in September 2021 according to the Westpac survey. The survey was undertaken during the continued national push for vaccination and the announcement of the New South Wales ‘roadmap to freedom’ came out mid survey period. The bounce back in the index points to an increase in optimism about vaccination levels and the near term “reopening”. Consumer sentiment increased dramatically in Queensland (8.4%) and New South Wales (5.3%), with Victoria remaining steady despite retreating back into another extended lockdown last month. The majority of the sub-indexes recorded an increase for the period, with only the ‘time to buy a major household item’ sub-index experiencing a decline in September 2021. Unsurprisingly, the level of consumer sentiment appears to be highly correlated with a demographic’s access to vaccination, with strong levels of confidence recorded in those who are due to be vaccinated and among the age brackets that have access to vaccines. Consumer sentiment in those who are unwilling or undecided on being vaccinated is lagging at around 90.

Retail sales

• 1 month - (2.7%)

• 3 months - (4.1%)

• 12 months - (2.7%)

Source: Australian Bureau of Statistics

The most recent ABS retail sales data released for July 2021 showed a decline of 2.7%, with seasonally-adjusted monthly sales falling below $30 billion for the first time since October 2020. Sales were 3.1% lower than the corresponding month last year, although they remain elevated historically with a 7.9% increase on the level of sales in July 2019. Sales across the states reflect their current lockdown status, with significant decreases in New South Wales (8.9%) and South Australia (3.3%) during their lockdowns in July moderated by increases in the less-affected states of Victoria (1.3%) and Western Australia (1.2%).

Online retail sales

• 1 month - 6.4%

• 3 months - 18.1%

• 12 months - 20.6%

Source: NAB Online Retail Sales Index

Online retail sales continued its recent strong run with an increase of 6.4% in July 2021 following a revised increase of 8.3% in June (previously 7.6%). These two results represent the largest accumulative increase in online retail sales since the beginning of the pandemic in March and April last year and are showing the impact of lockdowns in New South Wales and Victoria – the two largest markets. Online sales for the twelve months to July 2021 represented 13.6% of total retail sales during that period, which was 32.8% higher than the previous corresponding period.