Australians are opening their wallets, says CBA report

The Commonwealth Bank of Australia (ASX: CBA) has released a report finding Australia's spending habits are continuing to recover from 2020.

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The Commonwealth Bank of Australia (ASX: CBA) has released a report finding Australia's spending habits are continuing to recover from COVID-19.

The news comes as the Commonwealth Bank share price closes in on a landmark price tag of $100 per share.

At the time of writing, the CBA share price is up 0.44%, with shares in the bank swapping hands for $98.22. Earlier today, it hit yet another all-time high, trading at $98.62.

According to the Commonwealth Bank, Australia's spending intentions increased in April.

Let's take a closer look at the latest in CBA's series of economic reports.

A smiling woman with a handful of $100 notes, indicating strong dividend payments

Image source: Getty Images

CBA finds Australia's spending intentions are increasing

Each month, the Commonwealth Bank Household Spending Intentions report uses CBA and Alphabet Inc's Google (NASDAQ: GOOGL) data to create a snapshot of future Australian spending.

In comparison to April 2020, spending intentions were up in all categories tracked by CBA last month.

CBA chief economist Stephen Halmarick commented on the findings, saying:

This comes as no surprise as we know that April 2020 was the low-point for spending as the first wave of COVID-19 restrictions hit Australians.

A year later, the economy has recovered strongly from COVID-19 impacts, with employment above pre-pandemic levels and household spending intentions on the rise as consumers once again feel confident about their economic prospects…

We expect the residential property market to be a key source of support for Australia's economy in 2021, driven largely by the very low level of interest rates.

The expectation that the housing market will support much of Australia's economic recovery comes from Australians' increasing interest in purchasing houses, alongside growing housing prices. The CBA expects housing prices to jump by 14% by the end of next year.

The bank said the 2021 Federal Budget painted a "brighter economic picture", while Halmarick stated: 

The Budget's targeted support programs aim to put more people into jobs and ensure the economic recovery is widespread.

Where Australia is spending money

The Commonwealth Bank reported that Australians intended to spend more on homes, retail, travel, health and fitness, entertainment, education, and vehicles in April compared to the same time last year.

When compared to data from 2 years ago, Australians intended to open their wallets more for houses, entertainment, and vehicles.

Perhaps unsurprisingly, we're spending less on door-to-door sales, duty-free goods, movie theatres, live music, and videotape rental stores than in pre-pandemic years.

Instead, Australians are spending more on eating out, bowling alleys, and digital entertainment such as books and movies compared to 2019.

While we're dishing out the dollars much less on travel than we did in 2019, we're spending more on camper trailers and caravans, buying and renting motorhomes, and staying at caravan parks or camping grounds.

CBA share price snapshot

2021 has been a fantastic year on the ASX for the CBA share price.

Currently, shares in the bank are up 17.6% year to date. The CBA share price has also lifted 67.2% over the last 12 months, having recovered well from the COVID-19 induced recession. 

It has a price-to-earnings (P/E) ratio of 26.25 and a market capitalisation of around $173.4 billion. CBA has approximately 1.7 billion shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares). The Motley Fool Australia has recommended Alphabet (A shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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