According to recent economic insights from RBC, spending on household construction and improvement is already back to pre-COVID levels.
So that’s what everyone’s been doing with their time.
All those household improvement projects people are always putting off seem to have finally found their time to shine – when there’s literally nothing else people are allowed to do. (We kid, we kid.) According to the report, which is based on consumer spending tracked through anonymized card transactions by Canadian clients, “Spending only rose significantly in a few categories, like household construction, suggesting people used at-home time to complete projects, or bought scarce goods wherever they could find them.”
Consumer spending was down ‘just’ 17% from pre-crisis levels through the first three weeks of April, a much stronger showing than late March when spending reached a low point of -30% from pre-crisis levels. Further data will be released in the coming weeks that’s expected to capture the full scope of April’s spending habits.
While RBC says “spending on household goods and services climbed to pre-crisis levels, driven by spending at construction material, appliance, and furniture stores,” it’s clear that the real financial winner of the pandemic has been software and data, as seen in the above graph.
The report also shows Canadians were all about finding ways to entertain themselves at home, with strong spending in April at merchants selling books, music and other goods, and on services like cable and streaming.
RBC’s data also continues to confirm that the travel and hospitality industries have been among the hardest hit during COVID-19, with spending on restaurants down 50% through April and local and international travel down more than 80%.
Interestingly, despite spending on local travel being down, consumers are continuing to spend money on gas and automotive-related costs, though RBC suggests this likely reflects gas prices that have recovered from crisis lows.
As RBC notes, “The concentration of spending and modest changes elsewhere make us wonder whether these green shoots signal braver consumers, or if spending will fall back down soon.” It’s too soon to tell how quickly the economy will return to normal, or if the normal will even be recognizable, but it’s clear that people are still spending money where they have to, and in some places they don’t.