The banks data is painting a very rosy picture.
I know I’ve got access to a lot of info that most people don’t. It’s what happens when you’ve been around as long as I have.
(… and have a paid researcher on staff!)
At any rate, today I thought I’d do a whip around the data coming out of the big banks – particularly their sentiment data.
On the whole, it paints a very rosy picture. It paints a picture of an economy rebounding very quickly, and set to push on to even greater highs.
First up, let’s take a look at Westpac’s Leading Index. This pulls a whole bunch of things together – confidence, employment intentions etc.
Anyway, it shows just how sharp the recovery has been. The way down was pretty similar to the GFC experience. But the ride back up? It’s a totally different story, and is paving the way for a booming economy in 2021.
And this isn’t some outlier result. All the banks are telling a similar story.
Take the NAB business survey. Business Conditions and Business Confidence (both taken from surveys) have fully recovered from their Covid glums.
The other really interesting thing from this survey is the cash-flow position. Check it out:
That’s telling us that businesses right now are enjoying the best cash flow position in years. That’s going to give businesses a warchest to invest and hire with, both of which will push economic growth even higher.
Now just to cross-check, this doesn’t come from a bank – it comes from a Roy Morgan survey, but it is also showing that Business Confidence in Australia is very solid.
Over to CBA now. CBA have an interesting data release called the Household Spending Intentions series, which surveys households on their spending intentions over othe coming year.
The general trend is up, with some strong points in particular. Travel is bouncing back (presumably on domestic travel, which is good news for our economy), while retail spending intentions are booming!
This survey also gives us an insight into Home Buying Intentions. They’ve bounced back pretty strongly, and are now holding around normal levels.
Finally, Westpac’s Consumer Confidence survey tells us that Consumers are feeling positively jubilant, with the strongest reading in almost ten years.
So put it all together and you have a very consistent picture about an economy recovering quickly, driven by a confident consumer and strong retail spending, which in turn is supporting the business outlook (and profitability).
If there’s a cloud to this silver lining, I can’t see what it is.
JG