Consumers Will Spend Spend Spend Claims Access Economics
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Despite warnings from GfK consumers are set to continue spending on CE products according to a retail report prepared by Access Economics and set to be released today.

According to the Melbourne Herald Sun Access Economics Claim that consumers will shrug off interest rate rises and volatility in the share market and continue spending.

“The fundamental supports are in place for a spender-bender 2007-08 the Melbourne Herald reports.

Retail is travelling at its fastest pace since the east-coast housing surge faltered in early 2004,” the report says.

“We see gains in retail turnover volumes peaking at 5.1 per cent in 2007-08 before moderating to 3.3 per cent in 2008-09 and bottoming at 1.4 per cent in 2009-10.”

This comes after some of the country’s biggest retailers have shown strong profit growth during the recent reporting season.

A surge in demand for plasma-screen televisions helped stand-out performer Harvey Norman lift profits 77 per cent to $407 million.

The most recent Australian Bureau of Statistics data shows sales growing at almost double expectations to $19.4 billion.

The ABS figures show that in the past four years, monthly consumer spending has risen almost 30 per cent from just over $15 billion to $19.4 billion.

 

Yesterday’s Westpac-Melbourne Institute survey also showed a 4.2 per cent rise in consumer sentiment this month.

Westpac chief economist Bill Evans said the survey findings showed confidence was highest among the younger generation and ALP voters.

“Steady interest rates, a modest fall in petrol prices and continuing good news on the labour market and the broader economy would have been the supporters of the index,” he said.

“These factors have clearly offset any concerns emanating from global financial markets.”

The Westpac survey showed that confidence among consumers aged 18 to 44 was up 7 per cent, while those over 45 were much less optimistic, up only 0.6 per cent.

According to the Australian Institute of Petroleum, prices at the bowser have fallen 2.5 per cent since the end of July.

But CommSec chief equities economist Craig James said the strong oil prices of recent weeks could threaten petrol prices, which are currently close to a five-month low.

“We expect oil prices to remain high in the short term, but gradually ease over the latter months of the year in line with normal seasonal practice,” he said.