28 Apr 2020
Australia appears to be on the brink of controlling the spread of the virus, with the number of new daily cases in mid-April averaging just 14. Restrictions put in place by the federal and state governments have proven effective, so far.
"A key question will be whether individuals are feeling comfortable and confident enough to head outdoors. At this stage, Australians appear to be largely staying put.”
The success in flattening the curve has allowed some states like Queensland, New South Wales and Western Australia to ease some social distancing measures. And, as more easing occurs at state and federal levels, observations of household behaviour will help in determining the shape of the economic recovery.
A key question will be whether individuals are feeling comfortable and confident enough to head outdoors. At this stage, Australians appear to be largely staying put.
However, foot traffic data from Melbourne’s central business district (CBD) suggest the number of people walking around on the weekend of 25-26 April was up around 57 per cent compared with the first weekend of April.
Absent a resurgence in virus cases, the progress of these figures over the next few weeks will show how many people are heading back into the CBD.
At the onset of Australia’s shutdowns, people worried about the implications for the economy. Internet searches for the word ‘recession’ skyrocketed.
Over the last month, as governments have released a record stimulus package, recession concerns have come off the highs. Nevertheless, internet search figures for ‘recession’ are still above where they were prior to the crisis, suggesting economic concern remains.
This is consistent with ANZ Research’s consumer confidence measure.
Internet searches for ‘unemployment benefits’ also indicates considerable layoffs. Although the number of searches is dropping, it is considerably elevated relative to before this crisis. ANZ Research thinks this reflects job losses.
Consistent with ANZ-observed spending card data, precautionary over-buying of staples, like toilet paper, appears to be over.
With everyone spending more time at home and with uncertain job prospects, perhaps some are thinking it might now be a good time to start that business. Searches for ‘starting a business’ surged in April.
With auctions and open homes banned in most states, it isn’t surprising that fewer people are searching for house purchase-related terms like ‘stamp duty’ and ‘mortgage rates’. This may translate into lower housing demand and a fall in prices.
As recently noted, the ANZ Housing Search Index (HIS) suggests prices may fall around 9 per cent by the end of July.
Hayden Dimes is Market Economist and David Plank is Head of Australian Economics at ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
28 Apr 2020
24 Apr 2020