kia ora i'm jeremy couchman senior economist at kiwibank we've released our inaugural household
spending tracker report where we've delved deep into kiwibank's own electronic cards data
to get a sense of what overall spending did in the september quarter and remember that this
is the quarter that include auckland moving to level three lockdown now overall spending
jumped quite a bit it increased a little over 20 percent compared to the june quarter
but a big rebound was expected given that back in april we were in a nationwide lockdown
now what are some of the developments interesting stuff that's come out of this data well it looks
like on the positive that kiwis have certainly adapted to life under covid as we've moved up
and down alert levels so looking at auckland in particular around the level three lockdown
there was the very familiar run-up and spending ahead of it followed by a bit of a dip but this
was nowhere near as exaggerated as we saw last time auckland went into a level three lockdown
so what might be going on here well the big run up or the stockpiling of stuff way back
in march on things like toilet paper probably carried us through till now but also it looks
like businesses have learnt to adapt to life under covid so they'll focus more on online and digital
channels where they can and also where there's been limited face-to-face contact they've been
able to sell things through other ways such as click and collect which has been popular now the
increase in spending certainly the size has been a surprise but what has been more surprising is just
how sustained this level of spending has been this can't just simply be explained away as a bit of a
sugar rush hit in terms of spending so what else might be going on here well with our borders being
closed the typical kiwi who's gone who would typically go over and have a winter holiday in
the sunnier places just simply couldn't do that this year so that unspent travel budget
looks like it's been redirected domestically so we certainly have seen where kiwis have been able to
travel domestically over the third quarter there was a big spend up in domestic airfares and also
accommodation also we're spending a lot more time in our homes so partly that's because many of us
are working from home and we're starting to notice say perhaps the odd job that we've put off for a
while now and are starting to you know spend a lot more on our houses also we've seen a big rebound
in the housing market in general and when you have a buoyant housing market more activity and
more turnover you just generally get a big spend on things that are related to housing as well
so we look at kiwibank's customers the amount of spending at hardware stores has been significantly
up it's running around about 80 percent at the moment 80 percent above where it was in
the months leading up to the nationwide lockdown now what are some of the other interesting trends
that we've seen in the data well there's certainly been some changes and habits around spending and
this may be permanent we'll just have to wait and see but there's been some good developments
and also not so good so on the good side well we've seen a big increase in the amount of
spending on fresh fruit and vegetables partly probably because we haven't been able to go
to our favorite restaurant in some parts of the country so we're speaking more at home
but even as restaurants have opened up we're still spending a lot more on fresh fruit and vegetables
and maybe this is just a rational health response good health response to what is a health crisis
so long i guess may that last but unfortunately we are also spending more on things like alcohol
and gambling some of this may be just spending on cards relative compared to what we were spending
on cash in terms of spending on alcohol we know that bars and clubs and pubs have been closed
in many parts of the country so you know some of that spending has just been drinking at home
but you know even as they've opened up that spending still remains slightly uncomfortably
high now what we're going to look at in the future we know that auckland is moving to alert
level one so we do expect a further increase in spending in auckland and that's partly because
with less restrictive social distancing measures there'll be able to be larger gatherings and
events there but what we're really focused on is what's going to happen in the months beyond
you know heading towards summer so in summer well first of all we know that the government's
wage subsidy that's helped cushion the blow for many workers and firms over covid is starting
to wane and unfortunately that's likely to mean an increase in job losses and business failures
the other thing is as we move into the busy summer period this is you know the typical busy period
for many tourist providers and this year we're unlikely to see the typical surge in international
visitor arrivals that we get so unfortunately that's going to be quite a big hit for that sector
now while it's been encouraging that kiwis are getting behind the tourism sector and traveling
and seeing our country during summer it's unlikely to be enough to offset that hole left by the lack
of international visitor arrivals now we hope that you've enjoyed our inaugural spending tracking
report and we look to release this early next year until then thank you for watching