Given the devastation caused by months of fire, it is hardly surprising consumer confidence has wilted again, and that means there is likely to be little respite for struggling retailers.
Australia's devastating bushfire season has driven already weak consumer confidence even lower, pointing to an abrupt end to the mini-boom in retail late last year.Retail sales are likely to sink again after a mini-boom inspired by Black Friday sales in NovemberWhile households remain concerned about the economy, most expect house prices to keep rising
The respected Westpac-Melbourne Institute Index of Consumer Sentiment dipped deeper into pessimism falling a further 1.8 per cent to 93.4 in January. A reading of 100 is the breakeven point between optimism and pessimism — the lower the number, the grimmer the outlook."Since the lows of the global financial crisis, where the index averaged only 89 over a 15-month period from March 2008 to May 2009, there have only been seven monthly readings where the index has printed below 93.4," Mr Evans said.
"In short, confidence has been further eroded by the bushfires but, because the index was starting from such a modest level, it was likely that the fall in confidence would be less than some may have expected." Mr Evans said the pessimism is consistent with the generally lacklustre reports on consumer spending.
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