Spain | Consumption Outlook. First half 2020

Summary

The health crisis is causing an unprecedented collapse in consumption. Spending on durable goods loses in three months what it has regained in seven years. The decline in vehicle purchase intentions anticipates a significant contraction in demand in 2020, which will rebound in 2021.

Key points

• Key points:
• In the central scenario, household consumption will fall by -8.7% in 2020. In 2021, it will increase by 3.4% due to the improvement in its determinants and the absorption of part of the pent-up demand in 2020.
• Job destruction, declining household wealth and rising uncertainty are having a particular impact on consumption of durable goods, which could lose in three months what it has recovered in seven years.
• The automobile is the paradigm of the decrease in consumption of durable goods. In the absence of the pandemic, around 190,000 more cars would have been registered in March and April. No region, channel, segment or motorization is spared.
• The decline in vehicle purchase intentions anticipates a significant contraction in demand, which could reach -40% in the central scenario (765,000 vehicles). In 2021, the expected economic recovery and the decrease in uncertainty will drive registrations to exceed 1,100,000 units.
• Sales could drop below 700,000 units if the scenario deteriorates or exceed 870,000 if uncertainty decreases more than expected in 2H20.

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