According to the Westpac survey, consumer sentiment retreated by 4.8% to 113.1 in May 2021 from an almost eleven year high in April. The Budget was released in the middle of the survey week and Westpac noted consistent sentiment reads pre and post release, indicating the fall was not Budget-related. Despite the fall, the result represents the second highest point since April 2010 and follows an 11% rise in the index over the 3 months to April. Each of the five components of the index fell during May 2021, with significant decreases experienced in ‘family finances next 12 months’ (6.9%) and ‘economic conditions next 5 years’ (6.7%). The most recent ABS retail sales data released for March 2021 revealed a rebound of 1.3% following a decrease of 0.8% in February. Sales exceeded $30 billion for the fifth consecutive month and were 2.2% higher than the corresponding month last year, surprising noting March 2020 included the impact of initial ‘panic buying’. Results were again mixed among the states, with the highest growth in Western Australia (5.5%) and Victoria (3.5%) offset by decreases in the ACT (2.9%) and South Australia (1.1%). March was the final month of JobKeeper payments so April’s data will be the first insight into spending reaction however we note consumer sentiment was at record highs in April. Online retail sales experienced a slight decline of 0.5% in March 2021 following a revised contraction of 0.1% in February (previously 0.1% increase), with sales for the twelve months to March 2021 comprising 13.3% of total retail sales during that period, an estimated 46.7% higher than the previous corresponding period.

Source: Westpac – Melbourne Institute Consumer Sentiment Index

Source: Australian Bureau of Statistics

Source: NAB Online Retail Sales Index