Solid post Christmas spending could indicate that Australian consumers have responded to lower interest rates and the government stimulus package.
Despite increasing economic uncertainty, Australian consumers spent a greater than expected $6.5 billion in the January sales.
According to the Australian Retailers Association (ARA) retailers benefitted from the government’s stimulus package with sales between Boxing Day and 31 January exceeding expectations by 3.2 per cent.
ARA executive director Richard Evans said retailers were beginning to see the effects of the Reserve Bank’s rate reductions with a significant impact to be felt by March or April and a sustained improvement on the cards for September.
"We now see improved growth to return by September 2009, but the rest of the economy lags three to six months behind the retail sector cycle. This means there may not be good news for other industries until December 2009/January 2010,” he said.
"Retailing is the barometer of the economy and although there are signs of emerging consumer confidence the sector needs more stimuli to drive cash and thus save jobs," Evans said.
The ARA is calling on the government to implement a range of measures to stimulate consumer spending including incentives for lenders to provide lower credit card rates, personal tax income relief and a targeted consumer stimulus package.