The latest Australian ABS Household Impacts of COVID-19 Survey for September has provided key insights around consumer activity, finances and the labour market. This survey covered the period between 11-21 September and was based on around 1,500 responses from a sample of 4,900 households. The key findings are discussed below.
ABS Household Impacts Survey | Household Activity
This survey showed the change in frequency that has occurred across a range of activities over the 6-month period from before the onset of the pandemic to mid-September. Due to the impact of social distancing and Victoria's shutdown, the prevalence of working from home arrangements (at least once a week) has almost doubled to 40% in mid-September from 21.5% back at the start of March.
Ongoing restrictions and precautionary behaviour have contributed to the frequency of weekly activity declining over the period for; public transport usage (8.5% from 22.3%), patronage at bars and restaurants (16.8% from 35.8%), participation in social gatherings of more than 10 people (8.9% from 26.8%), visiting public parks or recreation spaces (39.2% from 52.4%), exercising at a gym or playing sport (23.5% from 39.7%) and going shopping (72.8% from 85.3%). Seasonal effects could potentially account for at least some portion of these declines, though the overriding factor is undoubtedly the pandemic and ongoing containment measures. While the fiscal and monetary response in Australia has been very significant, this cannot fully offset the impact of the pandemic due to the nature of the measures required to contain it that involve restricting activity.
These findings give more context to the separate high-frequency mobility data that indicate activity still remains below pre-pandemic levels across the capital cities, even in the cities outside of Melbourne that have been able to maintain progress in their reopenings.
ABS Household Impacts Survey | Household Finances
Where the fiscal and monetary responses can and have been effective is in shoring up household balance sheets. In mid-April, before the Government's income support measures (enhanced JobSeeker payments and JobKeeper wage subsidy) had taken effect, a notably high proportion of households reported a deterioration in their finances (31.4%) as the labour market was breaking down. By mid-June, this was corrected down to 18.7% as these measures played through, which then moderated to 16% by mid-September. Looking at this from another perspective, there has been a sequential improvement in the proportion of households reporting a stabilisation in their finances from a low of 54.9% in mid-April to 65.7% in June and 71.8% in September.
However, it should be noted that the level of the Government's income support measures has since been tapered. In late September, the enhancement to the JobSeeker payment reduced from $550 to $250 per fortnight, while the JobKeeper wage subsidy was lowered from a flat rate of $1,500 per fortnight to $1,200 for full-time workers and $750 for part-time workers, while the eligibility criteria for businesses to participate was tightened. It could be argued that the tapering to some extent comes as a response to the improvement in the underlying economic conditions and that household balance sheets, having been strengthened by the earlier stimulus, are now in a better position to weather this given the strong boost to the level of saving that occurred over the June quarter.
Still, as per the chart below, for each of the areas of spending, a much greater proportion of respondents expected they would be decreasing their level of spending over the coming month than increasing it. Potentially, this could be in anticipation of needing to cut back in response to the tapering of income support, though it might also be a sign that the level of pent-up demand, particularly in the more discretionary areas (leisure activities, eating out etc) that accumulated during the shutdown is now reducing. Additionally, spending on household goods ran up very strongly earlier in the year as people made preparations to work from home, so it is understandable spending expectations here would start to moderate after purchases were made.
ABS Household Impacts Survey | Labour Market
While the ABS's other high-frequency data on the labour market through the weekly payrolls reports have been indicating that employment growth has recently slowed, the responses in this survey suggest it has been more of a stabilisation, though the data points are not directly comparable. The level of respondents saying that they had a job was 68.3% in September, which was essentially unchanged from August. The official Labour Force Survey in August reported that the level of employment in August was around 3.2% lower than where it was pre-pandemic but up from a trough of -6.7% in May.
