But here is the anomaly. It just doesn’t make sense to all the struggling businesses out there, particularly retailers. And it is not just small businesses. Look at all the high profile profit warnings and even collapses in recent months from big business.A closer look at this week’s figures reveals some interesting variations.
1. Western Australia, Queensland and Northern Territory are roaring along while Victoria and NSW are whimpering. cont'd
2. Different industry sectors are producing different results. Mining is soaring while housing construction falters. Household consumption is up but retail sales and profits suggest that high levels of discounting are the reason.
The list of anomalies goes on - Discretionary spending in many areas is down but air travel is booming. Times are tough but just try to get consumers to give up their smart phones or tablets or the mobile and internet plans that support them. Times are tough but “I really need a 55 inch screen to watch the Olympics”. And as one of our traders said today, “You can’t increase savings in Australia from negative in recent years to a whopping 9% of income, and not leave a hole in spending somewhere”.
What is the bottom line? There is something positive going on out there. Keep your ear to the ground, and talk to your customers and, maybe you will be able to hook into the boom.