Caravan and motor home spending has surged as Australians are choosing to hit the road while international and state border restrictions hinder far flung holidays.
Latest spending data from the Commonwealth Bank has found spending on rentals for camping and caravans lifted in December, as large scale state border restrictions started to ease.
Despite Sydney’s northern beaches cluster causing a setback in the middle of the month, CBA economist Belinda Allen said household spending remained robust throughout the month, with uplifts felt in entertainment, retail and health and fitness sectors.
“While the situation warrants some caution, we continue to expect solid household spending and economic growth for Australia through 2021,” she said.
Ms Allen did note weekly spending data collected through the major bank’s payment and card network had shown a cooling off in travel consumption in recent weeks as a result of new measures to curb COVID-19 transmission.
“I think the reimposition of state borders could create further uncertainty around booking interstate travel,” she said.
“We did see that pick up back in late November and early December when Melbourne came out of lockdown and state border reopened … we actually did see quite a big lift in those items, but that has come off again.”
Increased consumption in hospitality and food services during December was the primary driver of the rise in entertainment spending, while the Christmas trading period bolstered activity in the retail sector.
Home buying in December pulled back from levels seen in November, however the major financial incumbent expects the ongoing low interest rate environment will buoy the property sector during the coming year.
“We continue to expect the home buying market to be a key source of support for the Australian economy in 2021 – driven largely by the very low level of interest rates,” Ms Allen said.
The Reserve Bank of Australia is expected to provide an update on its economic outlook in early February, which could reveal further monetary measures to assist in the country’s financial recovery from the pandemic.
RBA governor Philip has previously said the central bank will not increase the cash rate while inflation levels remain below the target range of 2 to 3 per cent.