Australia’s economy has withstood external challenges such as the Asian financial crisis in 1998 and recession in USA in 2001 because of the strength of consumer spending.
But can Australia’s consumers, whose spending represent over 60% of GDP, continue their spending growth in the face of not just one but potentially multiple challenges? While storm clouds are gathering in America and economists revise down their forecasts for world growth (for the third time), Australian interest rates continue their seemingly relentless upwards trajectory. And we may have all our eggs in the China basket which could be risky, especially immediately after the 2008 Beijing Olympics.
There is little doubt that consumer spending growth, which was booming in late 2007 and started 2008 with strong momentum, will slow somewhat over the next 18 months or so. While we consider it unlikely that the slowdown will be severe, there are no guarantees. Factors such as tax cuts, the price of petrol and house prices will also influence discretionary spending.
In such an uncertain environment, it will be important to have costs under control and to have maximum flexibility in marketing strategy and inventory management. Contingency plans and tracking of key consumer spending indicators – especially which consumers are most willing and able to spend – will enhance the likelihood of prospering over the next two years.
The suite of forecasting and tracking services developed by foreseechange over the past several years will provide early warning of any imminent downturn and identify the characteristics of consumers who are least affected and are, therefore, attractive target markets.
The forecasts and information tools include:
Australia in 2008 and Australia in 2009
These annual reports provide forecasts (retail sales, new vehicle sales, population, GDP, and more); assessments of risks of particular events; and a comprehensive analysis of consumer opinion trends. The latter provides an important indication about consumers expectations and concerns for the year ahead. For an example, download our Australia in 2007 report (pdf format). Our Australia in 2008 report was released in January 2008 and is available immediately. Our Australia in 2009 report will be released in January 2009.
Consumer Pulse
Our tracking surveys of consumer willingness and ability to save have been shown to be strongly correlated with retail sales growth. Accordingly, we can identify which types of consumer have cut back on spending and which types are still spending strongly. This enables tactical adjustment of target markets in any slowdown.
Also included are expectations about interest rates and house price, both very important predictors of consumer spending.
Download a Consumer Pulse report (pdf format).
Geodemographic Segmentation and Mapping
Interest rates have been rising for several years but this affects different consumers differently. We have analysed the 2006 Census by postcode to identify clusters, or segments, with similar exposure to higher interest rates within segments but different degrees between segments. This provides a geographic indicator of where consumers may be spending the same, more, or less.
Furthermore, we have combined data from our Consumer Pulse surveys to indicate how willingness and ability to spend, and house price expectations, vary between groups of suburbs.
Consumer Spending Dashboard
Our dashboard, which is frequently updated, tracks key drivers of consumer spending and consumer reactions to this environment. As well as providing up to date data and commentary, the dashboard can also be used as a basis for your internal analysis and presentations.
View the dashboard (powerpoint file).
Timing of Outputs
Australia in 2008 is available immediately we receive your order and forecast updates for population growth and GDP are available in April 2008. Further forecast updates will be provided throughout 2008 and early 2009 (subscription renewal will be due in May 2009).
Australia in 2009 will be released in January 2009.
The next Consumer Pulse update will be released in May 2008 and there will be further updates in August, November, and quarter 1 of 2009.
Our geodemographic segmentation reports will be released by state (each state is individually analysed) starting with NSW in May 2008, followed by Victoria in June, Queensland in July, WA in August, and SA in September.
Our dashboard is continuously updated and can be downloaded from our website. From July 2008, this will be available to customers only.
Benefits
The main benefit is that our forecasts and information will increase the likelihood of making correct strategic decisions with regard to plans for budgeting, advertising, and inventory.
Cost
The cost is $500 (including GST) which includes all outputs until the end of June 2009.
How to Order
Please download, complete and return the order form (pdf format)
Customisation and Presentations
Presentations to your executives and/or clients can be arranged and our analytical approach can be customised. Contact Charlie Nelson to discuss (03) 9386 4841.