Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Save

Retail reaches turning point: Why consumers will spend more in 2019

By Cameron Micallef · August 27 2019
Reading:
egg
egg
egg
Retail shopping

Retail reaches turning point: Why consumers will spend more in 2019

author image
By Cameron Micallef · August 27 2019
Reading:
egg
egg
egg
Retail shopping

After years of sluggish growth, the retail sector has reached a turning point due to the combined benefits of interest rate cuts, fiscal stimulus and a stabilisation of the housing market, according to economists.

In its economic update, the Queensland Investment Corporation (QIC) highlighted previously tough retail conditions that were compounded by falling house prices and a mining slowdown. 

It cited optimism in the federal government’s personal income tax cuts of up to $1,080, which it estimated will boost household disposable income by $7.7 billion, or around 0.6 per cent.

Given the tax offset is directed towards low and middle-income earners and is a lump sum, QIC estimated that around two-thirds of the money will be spent rather than saved. 

This will boost consumer spending by around 0.4 percentage points in 2019-20.

Advertisement
Advertisement

Based on information from the 2009 tax cuts, QIC considered that around 70 per cent of the additional spending by consumers would be on retail goods, implying a boost to retail sales of around 1.1 percentage points.

Combining the tax cuts with interest rate cuts and house price stabilisation, the QIC is expecting annual average retail sales growth to pick up to around 3.8 per cent in 2020.

Across the states, Victoria is predicted to outperform the other states in retail over the next decade due to stronger population growth, but Queensland and Western Australia are still expected to benefit in the retail sector due to improved mining conditions.

For NSW, the retail sector is predicted to see slow improvement as the housing market stabilises, but this is predicted to be on a smaller scale than seen in previous years. 

Retail reaches turning point: Why consumers will spend more in 2019
Retail shopping
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article
author image

About the author

Cameron is a journalist for Momentum Media's nestegg. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leveraging their insights to grow your portfolio.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

About the author

Cameron is a journalist for Momentum Media's nestegg. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leveraging their insights to grow your portfolio.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

From the web

Recommended by Spike Native Network

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Copyright © 2019 MOMENTUM MEDIA