Retail Spending Falls Due to Cuts in the Federal Budget
By Mary Kate Manning
Australian retail spending has fallen for the second month in a row, as spending cuts in the federal budget dampened consumer confidence.
Retail trade was down %0.5 in May, following a %0.1 fall in April, the Australian Bureau of Statistics said on Thursday.
CommSec economist Savanth Sebastian said fears over May’s federal budget, as well as unseasonably warm weather were to blame.
Mr. Sebastian said that, there’s been a trend of a slowing growth story when it comes to retail activity over the last four or five months and you can really sum it up in a couple of words: federal budget and consumer confidence.
Those are the two big drivers of the weakness
The warmer weather is having an impact on clothing sales. Non-food retailing was down almost %1 which suggests the consumer has really crept back into its shell.
Mr. Sebastian thinks that the confidence will bounce back, but certainly not in the next few months. It’s going to take some time yet.
The article was originally posted at News.com.au.