Australians are cashed up and ready to spend big on travel, entertainment and cars this year, according to the latest data.
Commonwealth Bank of Australia (ASX: CBA) on Tuesday released its most recent Household Spending Intentions study results, showing the economy could be in for a massive post-COVID comeback in 2021.
"While the situation warrants some caution, we continue to expect solid household spending and economic growth for Australia through 2021," said CBA senior economist Belinda Allen.
Combining December data from the bank and Google, the study found spending intentions for travel rebounded into the positive for the first time in 2020.
Big year-on-year jumps in spending were recorded for camping and outdoor-related goods and services. CBA senior economist Belinda Allen said this indicated Australians were looking for fun in rural areas in lieu of international travel.
"Travel spending intentions jumped solidly in December 2020 as state border restrictions were largely lifted," she said.
Many state borders did close again late in the year after a resurgence of the coronavirus in Sydney and Melbourne. But card transaction data indicated these had a "modest impact" on spending.
The uplift in travel would be good news for ASX shares like Qantas Airways Limited (ASX: QAN), Regional Express Holdings Ltd (ASX: REX) and Webjet Limited (ASX: WEB).
We're also up for entertainment and cars
Both actual spending and Google search data showed Australians intended to spend more on entertainment. Health and fitness also showed a spike in spending.
Perhaps scared off public transport due to virus worries, Australians are also flocking to buy cars.
"Relative to the end of 2019, December 2020 saw strong increases in actual spending on new and used motor vehicles and an increase in loan applications to purchase a motor vehicle," said Allen.
A busy car sector is positive for ASX shares such as Eagers Automotive Ltd (ASX: APE), Carsales.Com Ltd (ASX: CAR) and Transurban Group (ASX: TCL).
One spending intention that dipped was home buying.
Housing fervour actually jumped in November, but cooled off in December — perhaps reflecting the quiet Christmas holiday period for the real estate sector.
"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," said Allen.
Allen added that a buoyant housing market would also support a boost in the motor vehicle sector.
CBA's Household Spending Intentions study is performed monthly, with the bank's actual spending data combined with Google search's prospective purchase data to form a forward-looking view for the Australian economy.
