Consumer sentiment continued its recent retreat with a decrease of 5.2% to 107.2 in June 2021 according to the Westpac survey. The survey was undertaken during the first week of the current lockdown in Victoria which appears to have dampened consumer confidence. The index has now fallen by 9.7% since its record high in April and sits at a similar level to January 2021 during the significant lockdowns in Sydney and Queensland. We note that the index is still up by 14.4% since June 2020 and 6.5% since June 2019. Each of the five components of the index decreased during June 2021, with large reductions experienced in ‘economic conditions next 12 months’ (10.3%) and ‘family finances vs a year ago’ (8.5%). Interestingly, South Australia and Western Australia suffered the largest falls in consumer sentiment with reductions of 10.9% and 9.0% respectively, followed by Victoria (7.5%). New South Wales only recorded a minor decrease (1.1%). The most recent ABS retail sales data released for April 2021 showed an increase of 1.1% with sales having now exceeded $30 billion for six consecutive months. Sales were 25.0% higher than the corresponding month last year (during the height of the national restrictions) and 13.6% greater than April 2019. April was the first month post the end of JobKeeper and the result shows consumers continued to spend at historically high levels, reflecting the record high consumer sentiment read in that month. Sales increased throughout the majority of the states with positive growth recorded in New South Wales (2.1%) and Victoria (1.6%), while Western Australia represented the only state with falling sales for the period (1.5%). Online retail sales continued the recent decline with a reduction of 3.7% recorded in April 2021 following a revised contraction of 1.0% in March (previously 0.5% decrease), with sales for the twelve months to April 2021 comprising 12.9% of total retail sales during that period, an estimated 39.6% higher than the previous corresponding period.
Source: Westpac – Melbourne Institute Consumer Sentiment Index
Source: Australian Bureau of Statistics
Online retail sales