Economic consultants, AlphaBeta have released interesting research showing that the Morrison Government’s stimulus is working to buttress the Australian economy from the coronavirus shutdown:
Let nobody tell you stimulus doesn’t work. AlphaBeta & illion have teamed up to deliver Australia’s fastest tracker of economic activity through COVID19. The weekly real time tracker shows a dramatic turn around in Australian consumption this week as $750 cheques began landing in the bank accounts of 6.8 million Australians. In the first several weeks of the crisis, consumption was falling at a faster rate than the global financial crisis. In the last week of March spending per person was a whopping 13% percent below normal levels.
The chart above shows that stimulus came to the rescue last week. The wave of stimulus money rippled through the data. Discretionary spending – which had fallen to 26% below normal levels – jumped by 10 per cent. Time will tell whether the stimulus puts a floor under spending, or just briefly holds back the tide.
CATEGORIES AFFECTED BY SHUTDOWN CONTINUE TO HURT
The stimulus didn’t do much to support parts of the economy that remain heavily affected by the shutdown. Spending on travel has slumped 78 per cent below normal levels. Cafés have fallen 42 per cent. Spending on gyms, public transport, hairdressers, pubs and entertainment has dived.
SOME CATEGORIES ARE BOOMING
The shutdown hasn’t been a disaster for everyone. Sales in Woolworths, Officeworks and Bunnings boomed over the last fortnight as many people stocked up on groceries, purchased home office supplies and bought hardware for odd jobs around the house. Alcohol, online gaming and pet care are also seeing a lot of growth as people spend more time at home.
WELCOME TO THE NEW CONSUMPTION PARADIGM
As Australians adjust to life at home, online retail and subscription services have been booming. Food delivery and meal kits have grown their sales significantly. We have seen a big boost to digital and subscription services including games, streaming video and music. The shutdown is accelerating the shift towards a new paradigm of e-commerce and digital consumption that has been building for some years.
This is useful data. Hopefully AlphaBeta provide regular updates.
