"Manufacturers are telling us that, while the fall in the Australian dollar and the May interest rate cut have been extremely welcome, they have not yet been enough to turn around a very challenging business environment, locally and internationally" - Innes Willox, AIG's chief executive officer
Sales at Australian retailers showed no change in June, as demand showed signs of slacking off in the country, as worries the economy is heading into a recession phase bruised consumers' mood. Figures from the Australian Bureau of Statistics said retail sales surprised market participants on the downside, registering no change in the first month of summer, after posting a 0.1% gain in May, and missing analysts' expectations for a 0.4% increase. In the June quarter, sales in terms of volumes increased for cafes, restaurants and takeaway food services by 0.6%, while other retailing inched up 0.2%. Amid main losers were sales of household goods and department stores sales, which fell 1.1% and 1% respectively during the second quarter. During more than a decade the domestic economy has been pushed mostly by resource-driven boom, however, it seems now this boom begin to wane, the economy is tipped to be in transition phase, trying to shift its focus to a non-mining sectors, such as constructions or manufacturing, to avoid a collapse in production. In addition to that, political uncertainty has added to instability in the businesses' and consumers' mood. While elections are now set for September 7, population may expect to stabilization in the economy, pushing the investment higher. At the same time, the latest polls are showing the majority of economists are expecting another rate cut later this year.
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