By Keri Agler, Current.com.au
The Business Outlook report by Access Economics confirms retailer suspicions that while the Australian economy is standing firm compared to its international counterparts, consumer spending is still at a fragile state.
The report surmises that families are saving rather than spending and that it may be 2012 before “the developed world gets its mojo back". However, that emerging nations are showing signs of strength is good news for Australia as this underpins commodity prices and is “stoking up an investment boom in engineering work which looks set to surpass anything we’ve ever seen before".
This, coupled with the predicted housing construction upswing and resultant low unemployment rate of 4 per cent expected by the end of 2011, is good news for the appliance sector.
This being said, Access Economic warns that families are “spooked by interest rate rises from the Reserve Bank (and top ups from the big banks), plus the risk of more to come”. An unwillingness to spend could be further impacted by variable mortgage rates, which could rise by one percentage point by the end of this year.