The Westpac-Melbourne Institute Consumer Confidence Index fell by 3.9% in December 2016.
The Westpac-Melbourne Institute Consumer Confidence Index recorded its second consecutive decline in December 2016, falling 3.9%. Westpac’s chief economist suggested that the reasons behind the fall in confidence are a result of concerns around the economy, interest rates and the labour market.
The index is now at a level of 97.3, its second lowest level since April 2015, which was immediately prior to the RBA’s decision to cut the cash rate and a better than expected federal budget. The index is now firmly in pessimistic territory.
All five component indices fell in December, with the most material declines being recorded in the sub indices tracking ‘time to buy a major household item’ (6.3%) and ‘economic conditions next 12 months’ (5.2%).
Retail sales grew by 0.5% in October 2016 (seasonally adjusted), as reported by the ABS.
The October result represents a slight slowing in rate of growth, however the result is still 0.2% above the average growth over the last 12 months.
Cumulative growth in retail sales is 3.9% over the last 12 months and 1.7% for FY17.
Geographic results were generally positive in October, with all states and territories other than South Australia reporting growth. The Australian Capital Territory was the standout performer (growing 0.9%) now recording four consecutive months of growth. Queensland (0.8%) and Tasmania (0.6%) continue to perform well, having recorded consecutive growth in the last 5 and 4 months respectively.
‘Other retailing’ was the standout category in October, recording its largest monthly improvement since May (where it grew 1.5%). ‘Household goods’ continues to perform well recording a 0.7% improvement over September, and takings its total growth for FY17 to date to 2.8%. ‘Clothing, footwear and personal accessory’ contracted for the third consecutive month and have not reported any growth since June 2016 (where it grew 3.3%). ‘Department stores’ remains volatile and has contracted 2.3% in the calendar year to October 2016.
Online retail sales
Online sales grew 0.5% in October 2016 (seasonally adjusted) as reported by NAB.
After recording growth of 1.4% in September, the NAB Online Retail Sales Index grew by 0.5% in October, continuing the recent volatility.
NAB estimates in the 12 months to October 2016, Australian’s spent approximately $21.08 billion online which is the equivalent of 7.0% of spending at comparable traditional retailers.
NAB report that the slowing in the rate of growth in October is a result of slowing in some of the larger spend categories included in the index, with ‘homewares and appliances’, ‘media’ and ‘groceries and liquor’ all reporting monthly contractions.