Please select your home edition
Edition
Marine Resource 2016

GFC hangover still impacting on consumer confidence

by Media Services on 7 May 2011
Consumer sentiment slow to pick up. MIAA
Consumer caution, led by born again budget-conscious and debt-fearful women, will hinder the Australian economic recovery, according to Commonwealth Bank of Australia chief economist Michael Blythe.

Speaking at the Australian Institute of Company Directors (AICD) business breakfast in Brisbane last week, Blythe was explaining the economic backdrop framing the economy.

In the lead up to the Federal Budget announcement slated for next Tuesday (May 10), Blythe described the economic backdrop as quite good and says it will remain good for the next couple of years, although there are some risks involved.

'From our research, when you turn to domestic risks, a big one is the consumer who is far more interested in savings and paying off debt than spending, so this cautious consumer and how that evolves will have an effect on the economy,' he said.

'It’s not so much consumer caution, it’s retail caution that we should be thinking about - one third of consumer spending is in the retail sector, so the retail sector is currently in pain. We also found that women dominate decisions in the retail sector of spending and men tend to dominate the spending decision in the non-retail areas of the economy.

'What stands out about this is that our female client base is much less optimistic about the outlook than our male client base, so the less optimistic the group that controls retail spending is the weaker that sector will be. To change those perceptions, there needs to be a strong labour market.'

Blythe says consumers should prepare for an environment where interest rates will increase over the next year due to two key factors.

'There are two indications that interest rates need to go up – there are inflationary reasons and with the mining boom, another sector has to step back and make room and the only sector big enough to do that is the household sector. Putting up interest rates has always been an effective way of putting a lid on household activity.

'When commodity prices rise, it tends to boost the nominal GDP rate. Real GDP over the next few years will grow by t3 to 3.5 per cent. At the same time, we think nominal GDP will grow by 7 or 8 per cent per (annually) and that’s an above average outcome.

'The mining boom mark two won’t deliver the same roads of gold that the mining boom mark one delivered, we’ve compared key indicators like profits, growth in capital spend and taxes paid by the mining sector.'

When the budget is released next week, Blythe said the economy is likely go into savings mode to counter its deficit.
'The various natural disasters will add to deficits and a flood levy will start later this year so we’re off track to getting back to a surplus in a few years time,' he explained.

'At this stage, it looks like a lot of savings measures will be pushed through, like means testing of the health insurance rebate, which will most certainly go through this time round and changes to middle class welfare payments.
'In terms of new spending, I think it will go towards mental health initiatives, education and training, incentives to encourage people from welfare back into the workforce and incentives for infrastructure related spending.'
NaiadProtector - 660 x 82Wildwind 2016 660x82

Related Articles

New Xperformance - Optimising the cruiser/racer range from X-Yachts
X-Yachts have built a wide range of 'Cruiser/Racers' as well as dedicated racing yachts which have won many Intl titles Since the company was founded back in 1979, X-Yachts have built a wide range of 'Cruiser/Racers' as well as dedicated racing yachts which have won many famous International titles, and of course One Design Class yachts such as X-79 and X-99
Posted on 14 Feb
World Sailing unites Kiteboarding governing bodies
World Sailing has today signed a landmark agreement with the IKA and the GKA to unite the kiteboarding community World Sailing has today signed a landmark agreement with the International Kiteboarding Association (IKA) and the Global Kitesports Association (GKA) to unite the kiteboarding community and provide clarity of kiteboarding's governance structure.
Posted on 13 Feb
On board interview with Lisa Blair - solo Antartica circumnavigation
So far, Lisa is tracking very well in her attempt to become the first woman to sail solo around Antartica. So far, Lisa is tracking very well in her attempt to become the first woman to sail solo around Antartica. After the setbacks of a delayed departure due to gremlins in the electronics, we are delighted to have these answers from her on board. She is well and enjoying her time. Climate Action Now, her Hick 50, left Albany in Western Australia on January 22, 2017.
Posted on 8 Feb
The price of legacy
Malcolm Page OAM, two-time Olympic Gold Medallist, became the Chief of Olympic Sailing for the USA on January 1 Malcolm Page OAM, two-time Olympic Gold Medallist (470) with Nathan Wilmot in 2008 and Mat Belcher in 2012, became the Chief of Olympic Sailing for the USA on January 1 this year. In and of itself it is hardly the freshest news, and well and truly yesterday’s fish wrapper. It was also a wise choice on behalf of Team USA, for he has succeeded in both the physical and commercial arms of our sport.
Posted on 5 Feb
Zhik becomes Official Clothing Partner to the Extreme Sailing Series
Extreme Sailing Series™ has established an exciting new partnership with the high-performance clothing brand, Zhik. As it enters the 2017 season, the Extreme Sailing Series™ has established an exciting new partnership with the high-performance clothing brand, Zhik.
Posted on 2 Feb
World Sailing headquarters to relocate to London
World Sailing's headquarters will relocate from Southampton to central London, UK in late summer 2017. World Sailing's headquarters will relocate from Southampton to central London, UK in late summer 2017. The selection of London as the new home for the International Federation comes after an extensive evaluation process of possible locations undertaken since the election of a new President and Board of Directors in November 2016.
Posted on 1 Feb
Henri Lloyd join forces with FAST40+ Class
Henri Lloyd is delighted to announce their three year partnership with the FAST40+ Class. Premium British marine and lifestyle clothing brand, Henri Lloyd is delighted to announce their three year partnership with the FAST40+ Class.
Posted on 1 Feb
Tawera takes the NZ Millennium Cup 2017
The Ron Holland designed and impeccably sailed, Tawera, again dominated a lengthier 27nm course on Day 3 of racing The Ron Holland designed and impeccably sailed, Tawera, again dominated a lengthier 27nm course on Day 3 of racing, taking line honours for a third consecutive day, bringing home the NZ Millennium Cup 2017. Coming into the final day of racing, Pacific Division competitors, Antaeus and Steinlager 2, were tied on points. Rumours of an extensive tactical defence strategy to retain the Pacific
Posted on 1 Feb
Rolex China Sea Race launches new official website
RHKYC today unveiled its new official website and logo for its flagship event, the biennial Rolex China Sea Race Royal Hong Kong Yacht Club today unveiled its new official website and logo for its flagship event, the biennial Rolex China Sea Race - Asia’s principal blue-water classic.
Posted on 28 Jan
Bavaria C57 - Something big has arrived
At the boot 2017 in Düsseldorf, Bavaria Yachts presented the new flagship of their sailing yachts' fleet. At the boot 2017 in Düsseldorf, Bavaria Yachts presented the new flagship of their sailing yachts' fleet. The Bavaria C57 does not only convince with a new modern design but also with many new innovative details.
Posted on 24 Jan