Thursday, October 14, 2010

We're about to hit the shops?

Retailers such as Gerry Harvey might be grumbling, but the strong dollar and booming jobs market appear to have made us our keenest to spend in years.

Raw figures collected for this month's Westpac Melbourne Institute consumer index show an astounding 63.5 per cent of us agreed that now was a good time to buy a major household item - the highest proportion since January 2005.

A mere 17 per cent felt it was a bad time to buy for the house.

Harvey Norman chairman Gerry Harvey and JB Hi-Fi chief Terry Smart said this week lower import prices were hurting their margins making conditions worse than in the global financial crisis.

But buying buying intention figures point to a very strong Christmas season, at least from the point of view of those buying.

At 46.7 percentage points, the gap between those prepared to spend and those not is one of the biggest on record and in excess of that seen in the 2007 spending boom.

The survey shows the confidence of Coalition voters improving in the wake of the election... jumping 7 per cent in October to be 14 per cent behind that Labor voters and well into positive territory.

Conducted in the first week of the month the results may reflect relief at the Reserve Bank's decision to leave interest rates on hold, although there remains evidence of caution with mortgage holders less confident than either tenants or outright owners.

The overall index climbed to 117 points, meaning that across a range of issues pessimists outweighed optimists 17 percentage points.

Westpac economics chief Bill Evans said confidence would "be tested" if, as he expected, the Reserve Bank boosted interest rates at its next meeting on Melbourne Cup Day.

Lending figures released yesterday showed loans for housing down 13 per cent in the year to August, loans for construction down 20 per cent, commercial loans down 7 per cent, and personal loans up 2 per cent.

New home building picked in the June quarter climbing 8 per cent after being flat in both the March and December quarters.

Published in today's SMH

Consumer Sentiment Index October

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