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Snap Lockdown Snaps Spending Streak
The resilience of household spending has surprised us, and has been a key driver of the Kiwi economy’s post-lockdown recovery. The splurge in spending over the second half of last year lasted much longer than expected. But now we have seen a pullback. Kiwibank’s transactional data suggests that the 2020 spending sugar rush might be coming to an end. Domestic spend declined 9% in the March quarter, the first time since the first lockdown ended. The buffer of household savings built up over the initial lockdown may be eroding. And digging through the details, most high-level spend categories were on a downtrend.
In the report we explore the following points:
The March quarter captured the two snap lockdowns Auckland faced in February. The service industry was hit hardest. But activity bounced as Auckland sailed out of lockdown, and the America’s cup attracted thousands to the viaduct.
One year on, and the WFH movement is here to stay. Demand for online services and office equipment remains elevated.
The long-awaited Aussie travel bubble will see many Kiwis leave, but more Aussies arrive..
Our economist, Mary Jo Vergara, summarises the report here.
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