Household spending almost 13 percent down in May

As indicated by the CBS Household Consumption Radar, the circumstances for consumer spending in July are less unfavourable than they were in May.

Consumption figures have been adjusted for price changes and differences in the shopping-day pattern.

Lower spending on services in particular

In May, consumers spent 22.4 percent less on services than in the same month last year. Services include visits to restaurants, hairdressers, theatres, gyms and football games as well as public transportation. However, consumers spent more on services such as telephone and internet subscriptions, insurances, housing services, private lease and courier services.

Consumer spending on food, beverages and tobacco was 6.3 percent up year-on-year. Spending on durable goods dropped by 1.6 percent. The decrease is smaller than in the previous month. Purchasing of clothing, footwear and passenger cars declined in particular. On the other hand, they spent more on electrical appliances and home furnishings compared to May 2019. Consumer spending on other goods, such as natural gas and motor fuels, was 7.0 percent lower than one year previously. This was mainly on account of a much lower consumption of motor fuels.

Three weeks ago, CBS reported a year-on-year turnover growth of 8.2 percent in May 2020. This is the highest growth rate in the span of 14 years. The volume of sales increased by 5.9 percent. Turnover was up in both the food sector and the non-food sector. These figures as well were adjusted for the shopping-day pattern.

Conditions less unfavourable in June

Every month, CBS publishes indicators to show developments around household consumption in the CBS Household Consumption Radar. Household consumption is influenced by factors such as consumers’ expectations, their personal financial situation and developments on the labour market. Although the Radar indicators show a strong correlation with household consumption, improved circumstances are not necessarily translated into increased growth.

According to the CBS Household Consumption Radar, circumstances for household consumption in July are less unfavourable than in May. This is mainly due to the less negative mood among Dutch manufacturers regarding future employment growth within the company. Consumers’ expectations on their own financial future were also less negative. In addition, the year-on-year decrease in stock market prices was smaller.