The Bureau of Statistics says purchases of food from supermarkets and convienence stores were flat in January after slipping a seasonally-adjusted 0.5 per cent in December. Spending in specialty stores lifted 0.2 per cent, spending on household goods fell 1.8 per cent.
“It seems the 0.50 point mortgage rate cut in late 2011 was celebrated by eating out,” said TD Securities economist Annette Beacher. “Consumers are spending, but increasingly on services, not all reflected in the retail figures.”
Commonwealth Securities economist Savanth Sebastian said consumers had had a couple of months to adjust to the interest rate cuts late last year but seemed to prefer services to goods.
“Both consumers and home-buyers are super-cautious and that mood is continuing to constrain activity for retailers and housing-dependent businesses... Anecdotally the drop in interest rates is boosting enquiry levels in the housing market, but it is yet to show up in healthy rise in home buying.”
Reserve Bank figures released yesterday show borrowing for housing weak, with lending up 0.2 per cent in January after growth of 0.3 per cent in December. The annual growth rate of 5.3 per cent is the worst in records going back 35 years.
The Housing Industry Association count shows new home sales slipped a seasonally adjusted 6.4 per cent in January to an 11-year low led down by a 19.6 per cent slide in sales of new detached homes in Victoria.
“Victoria for a long time propped up new home building in Australia and now the reverse is occurring,” said HIA chief economist Harley Dale. “Other large markets are not filling the void.”
Separate Bureau of Statistics figures released yesterday show spending on new homes down 1.5 per cent in the December quarter. Spending on renovations fell 3.1 per cent.
Total construction spending slipped 4.6 per cent after climbing after climbing 11.7 per cent to a new record high the previous quarter.
“Construction is both too hot and too cold,” said Westpac economist Andrew Hanlan. “Infrastructure work in the mining states of Queensland, Western Australia and the Northern Territory is booming. Work in the south-eastern states is declining.”
NSW retail spending slid 0.5 per cent in January. Were it not for extra spending on cafes and restaurants spending would have fallen 1.2 per cent.
In today's Canberra Times, and Age
. Year to December, weakest on record
. November 2010. Saving is nice, until shoppers do it
. It's the west and north that's doing it. Why our economic growth looks good