Confidence low at tills

RISING employment and wealth gains from housing are resulting in higher spending, but it would appear consumers are enduring a shopping spree through gritted teeth.

Deloitte Access Economics says retail turnover over the June quarter grew 1.5 per cent, the highest since the March quarter 2013. It follows a subdued start to 2017.

“But consumers aren’t happy,” the firm’s partner David Rumbens says in his quarterly Retail Forecasts report.

“Despite improvements in unemployment expectations and an increase in business confidence, consumer sentiment is at a low point with concerns over financial risks.”

This was borne out by the latest ANZ-Roy Morgan consumer confidence index, which dropped 3.8 per cent in the past week, all but wiping out tentative gains of the previous two weeks, and leaving it below its long run average.

The downturn came despite last week’s economic growth figures for the June quarter.

ANZ head of Australian economics David Plank said while the national accounts showed a rise in consumer spending, this was largely supported by a lower savings rate.

“Wages and overall household income growth remained very weak,” Mr Plank said.

The Deloitte report fore- casts 3.5 per cent retail turnover growth for the 2017-18 financial year, compared with 1.8 per cent the previous year.

But Mr Rumbens warns retailers are facing competition from the likes of Amazon, widespread discounting to lure in the consumer dollar and rising energy prices.

“It’s likely retailers aren’t so happy either,” he says.

However, a broader survey of small and medium-sized enterprises found confidence rising by 3.2 per cent for the September quarter.

The Westpac-Melbourne Institute SME index rose above the 100 mark for the first time this year, despite some concerns over profitability and increases in overheads and costs.

“SME owners expect to see the number of staff in their business grow within the next 12 months,” Westpac senior economist Matthew Hassan said. AAP