4 April 2018
Bob Cunneen, Senior Economist and Portfolio Specialist, NAB Asset Management
Australian nominal retail spending
Source: Australian Bureau of Statistics
Australian retail spending has struggled over recent years. For the year to February 2018, retail spending only increased by 3% (black line). This is soft spending growth compared to the average 4% annual pace from 2012 to 2016 (red line).
Why has retail spending been so soft? Well there is a shopping list of possible reasons. Rising electricity and health costs have crimped household budgets. There is limited scope to go shopping when the essentials of electricity and health costs have become expensive nightmares. Even generating income has been a struggle in this era of slow wages growth and very low interest rates for savers. The burden of paying off high household debt also worries consumers.
Yet there are some early encouraging signs that retail spending could gradually improve this year. The recent run of strong employment gains should eventually translate into rising wages. Consumer sentiment also seems to have improved with diminishing concerns over job security. So the Australian consumer could soon be causing traffic jams at the counters and at the parking spots.
This communication is provided by MLC Investments Limited (ABN 30 002 641 661, AFSL 230705) (“MLC”), a member of the National Australia Bank Limited (ABN 12 004 044 937, AFSL 230686) group of companies (“NAB Group”), 105–153 Miller Street, North Sydney 2060. An investment with MLC does not represent a deposit or liability of, and is not guaranteed by, the NAB Group. The information in this communication may constitute general advice. It has been prepared without taking account of individual objectives, financial situation or needs and because of that you should, before acting on the advice, consider the appropriateness of the advice having regard to your personal objectives, financial situation and needs. MLC believes that the information contained in this communication is correct and that any estimates, opinions, conclusions or recommendations are reasonably held or made as at the time of compilation. However, no warranty is made as to the accuracy or reliability of this information (which may change without notice). MLC relies on third parties to provide certain information and is not responsible for its accuracy, nor is MLC liable for any loss arising from a person relying on information provided by third parties. Past performance is not a reliable indicator of future performance. This information is directed to and prepared for Australian residents only. MLC may use the services of NAB Group companies where it makes good business sense to do so and will benefit customers. Amounts paid for these services are always negotiated on an arm’s length basis.
Powered by WPeMatico