Urbis Think Tank
Urbis consumer spending barometer providing faster leading indicator for retail
Each month, Urbis produces a barometer of consumer spending based on a number of factors that are predictors of consumer spending.
An alternative measure of consumer sentiment is provided by Westpac, and is often referred to in the press.
Comparing these two charts (below), we have observed that the Urbis consumer barometer is often a faster leading indicator of the shift in retail trends than the Westpac consumer confidence index.
This shows that the Urbis index has some benefits in predicting retail trends, whereas the Westpac monitor is really measuring attitudes, that are not necessarily related to future spending patterns. Indeed, in a speech yesterday, Tony Richards from the Reserve Bank described the current consumer as confident but cautious, based on the Westpac data. That is, he reiterated that the Westpac measure is not correlated with spending.
As you can see from the most recent Urbis data, the trend is slightly up, but only just above the neutral level. This supports our current view of a slow growth ahead.