Retail spending continues to fall

Submitted 4/07/2011

Migration for Business Growth

Figures released today by the Australian Bureau of Statistics reveal a decrease in local retail trade and a rise in building approvals.

Retail turnover in South Australia for May 2011 was 0.7 per cent lower (seasonally adjusted) than the previous month's figures.

This compares to the national retail turnover which decreased 0.6 per cent during the same month.

Business SA Chief Executive Officer, Peter Vaughan, said that low consumer confidence is having a major impact on local businesses.

"South Australia's continued decline in retail trade data reflects current levels of confidence throughout the local economy," Mr Vaughan said.

"The decline in consumer spending exceeded the national average and follows the trends that we've seen in recent months.

"The weakness in retail sales is widespread which is concerning given the importance of the retail sector to South Australia's economy.

"Businesses coninue to feel the pressure from low levels of consumer spending, along with rising wage costs, increased utility bills and various other escalating costs, rates and levies."

Local building approval figures went against the national trend wiht an increase in May 2011.

Data revealed that South Australian building approvals increased by a seasonally adjusted 5.7 per cent in May. This was in contrast with the national trend which saw a decrease of 7.9 per cent.

Approvals for private housing in South Australia also increased by 1.5 per cent, while national figures increased 0.7 per cent.

"South Australia went against the national trend with an increase in building approvals in May," Mr Vaughan said.

"The South Australian building approval data has been very volatile in recent months, however this is the second consecutive increase which is positive news.

"National private sector housing approvals continue to remain under pressure, signalling the economic uncertainty that remains throughout the local and national economy.

"Retail data and these national building approval figures indicate that  the two-speed economy is hurting many industry sectors and the Reserve Bank must leave interest rates on hold in the coming months."