Barbenheimer: the movies and the RBA

The dual release of Greta Gerwig’s Barbie and Christopher Nolan’s Oppenheimer, on July 20, led to the biggest Aussie box office weekend takings ever.

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According to the latest ANZ-observed Australian Spending data, the combined “Barbenheimer” premieres saw Australian cinema receipts soar 75 per cent week on week.

"If you look at the data, Barbenheimer and the nation’s Swifties will have a lot of heavy lifting to do if they are to shift the dial on slowing Aussie spending."

Interestingly this comes on the heels of Australian fans battling it out in late June for Taylor Swift concert tickets and tales of hardcore so-called “Swifties” buying multiple tickets at $379 a pop.

Are these signs the Australian consumer is shaking off inflation and interest rate rises and powering on with their spending? How much do one-off spectacular concerts or cinema box office receipts impact the larger economic cycle?

If you look at the data, Barbenheimer and the nation’s Swifties will have a lot of heavy lifting to do if they are to really shift the dial on the slowing trend in Australian spending.

And that could be important for interest rates and mortgage repayments. First let’s look at how Australians are spending.

According to analysis by ANZ economist Madeline Dunk, ANZ-observed spending is down 10.3 per cent year on year for the first 22 days of July.

“The level of total ANZ-observed spending has now dipped below both 2020 and 2022 levels, despite ongoing inflation and strong population growth,” Dunk said.

“Many households are tightening their belts as interest payments and inflation squeeze some cashflows. Consumer confidence is subdued, and the ANZ-Roy Morgan ‘time to buy a major household item’ subindex is near record lows.”

“The spending slowdown suggests monetary policy is getting real traction.”

Dunk points out non-food retail has declined sharply and is down 11 per cent year on year since the end-of-financial year sales. Travel and dining are down 17 per cent year on year and takeaway is also weak, slipping 12 per cent year on year.

So while Australians are happy to keep the old fridge or stove kicking along rather than replace it, they are also using these more rather than turning to home delivered pizza or Thai takeaway.

Which is where last Wednesday’s release of the Australian Bureau of Statistics’ Consumer Price Index for the June 2023 quarter come into play. These figures showed more evidence of the spending slowdown.

According to senior economist Adelaide Timbrell the Reserve Bank of Australia likely “found comfort” in this latest CPI release.

“It showed annual inflation to the second quarter of 6 per cent year on year. This is below its May Statement of Monetary Policy forecast of 6.3 per cent.“

“Trimmed mean inflation of 5.9 per cent year on year was also lower than the forecast of 6 per cent.”

“The RBA recently highlighted that the cash rate is ‘clearly restrictive’ and it remained to be seen if more cash rate increases are required.”

In the end, whether Australians checked out Barbie or Oppenheimer on the opening weekend, what could dominate conversation going forward is the ongoing implications of the restrictive monetary policy.

Jeff Whalley is a journalist 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.

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