Negative Talk Impacts Consumers
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| 'Consumer confidence has taken a tumble, due in part to a frenzy of media commentary.' . |
The Westpac-Melbourne Institute consumer sentiment index, released last Wednesday, showed consumer confidence was at its lowest in almost 20 years and consumers were less inclined to purchase a major household item than at any time since the 1970s.
Australian Retail Association executive director Richard Evans said: "When retailers were out there talking about the state of the market, other folk were not paying heed, still increasing interest rates and talking down the economy with comments about the 'inflation genie'. All the negative talk really impacted.
"We are the barometer of the economy and a lot of shopkeepers already knew the economy was on the downturn. Retailers were ignored."
Mr Evans welcomed the change in the Government's rhetoric, including Kevin Rudd's comments yesterday guaranteeing bank funds, as long overdue.
"Unless you are highly geared in loans and playing the stock market, you still have money to spend," he said. "Consumers need to understand that. The only thing that has changed is their confidence. If consumers stop spending, cash flow stops right through the market."
ANZ chief economist, Saul Eslake said he expected consumer confidence to fall further in the lead up to Christmas.
by Jeni Bone
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