The fall in consumer spending is reflected in the continuous drop in retail conditions as reported by National Australia Bank’s business survey for June.
Described as “worrying low levels”, the NAB has compared the retail conditions, which has deteriorated to -24 points, to similar levels that were last witnessed in the 2000s during the global recession and is by far the weakest industry.
According to NAB, the high Australian dollar, continued cautiousness of households and concerns about the global outlook is eroding business confidence sharply in June. The index is now in line with the relatively weak levels recorded in December where NAB surveyed businesses immediately following the floods.
The NAB now forecasts that there will be weaker conditions in the second and third quarter of the financial year 2011 based on continuing softness in discretionary spending, as well as the “severe weakens” in retail.
The GDP growth is expected to be of 1.7 per cent in 2011 and 4.6 per cent in 2012.
- Online sales softened in August as daily deal sites decline
- Online spending strengthens as consumers shop locally
- Business conditions, confidence drops
- Interest rate cuts not helping retail confidence
- Online sales drop in December, NAB says
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