Territory Stories

Territory economic review

Details:

Title

Territory economic review

Creator

NT Treasury, Economic Analysis Division

Collection

Territory economic review; Department of Treasury and Finance newsletters; PublicationNT; E-Journals

Date

2003-03-01

Notes

Date:2003-03; Made available via the Publications (Legal Deposit) Act 2004 (NT).; This publication contains may contain links to external sites. These external sites may no longer be active.

Language

English

Subject

Northern Territory -- Economic conditions -- Periodicals

Publisher name

Northern Territory Government

Place of publication

Darwin

File type

application/pdf

Copyright owner

Northern Territorty Government

Parent handle

https://hdl.handle.net/10070/212458

Citation address

https://hdl.handle.net/10070/716367

Page content

MARCH 2003 9 TERRITORY ECONOMIC REVIEW www.nt.gov.au/ntt/economic retail turnover The main drivers of retail trade showed mixed signs over 2002. Household income growth was relatively subdued, despite solid employment growth, and population growth weakened. Nonetheless, low interest rates and strengthening consumer sentiment encouraged household borrowing, resulting in stronger consumption spending and retail trade. Lower petrol prices (compared to 2001) also boosted household incomes and assisted the recovery in consumption. tourism-related expenditure down in 2002 Tourism-related retail turnover and consumption growth was again negative, as weak international economic conditions, terrorist attacks and more recently the threat of war, have affected discretionary international travel. other components strengthened Territory retail turnover growth tends to track national movements (see chart on page 4). Year on year, Territory real retail turnover increased by 5.7 per cent in 2002, compared to 5.5 per cent nationally. However, quarterly growth is starting to weaken, notably in the Territory, with seasonally adjusted growth down 2.3 per cent in the December quarter 2002. The ABS reports real Territory retail turnover of around $1.7 billion in 2002. Food, household goods and the not specified categories dominate, and combined they typically account for around 70 per cent of total retailing. Territory retail turnover growth was across most sectors in 2002: following negative growth in 2001, food retailing increased by 7.6 per cent in 2002, and was the major contributor to growth (3.5 percentage points). This is somewhat at odds with recent data reporting very weak population growth; not specified retailing, that is, department store retailing and grouped confidential items (which includes spending on discretionary items such as sporting and outdoors goods, toys and games, photographic equipment, antiques and nursery items) increased by 18.3 per cent, and was the next largest contributor to growth (1.9 percentage points). Growth in this category reflects strengthening consumer confidence and low interest rates; household goods retailing increased by 5.1 per cent, contributing 0.7 percentage points to growth. Growth in this category reflects some recovery in dwelling construction activity in 2002, with the flow through to increased demand for fit out items such as carpets, tiles and appliances; recreational goods retailing, typically the smallest category, increased by 6.9 per cent. This comes after very weak to negative growth in the period since the introduction of the GST; clothing and soft good retailing declined by a modest 2.4 per cent, following an extended period of growth back to 1999; and hospitality and services remains weak, with turnover falling by 4.3 per cent in 2002, subtracting 0.8 percentage points from growth. Tourism-related, this category continues to be negatively affected by weak global economic conditions, further exacerbated by terrorist attacks (turnover fell markedly in the quarters following the attacks in New York and Bali). motor vehicle sales Territory motor vehicle sales trended back down in calendar year 2002 after picking up to some extent, though from a weak base, in 2001. Private sector registrations increased by 2.9 per cent in the year to January 2003, despite continued weakness in the rental market. consumption growth set to consolidate Some easing back in private consumption growth is likely in 2003. Higher petrol prices, related to developments in the Middle East will have a negative impact on discretionary disposable income, dampening consumption expenditure to some extent. Also, the recent appreciation of the Australian dollar will have the effect of discouraging international visitors coming to Australia, at the same time encouraging Australian tourists to travel abroad rather than holidaying locally. but overall, positive consumption outlook Nonetheless, low interest rates combined with the solid outlook for employment and dwelling and other construction should underpin expenditure. In the short term, consumer confidence, which has been falling recently, will play an important role in determining growth in retail sales and other components of consumption expenditure. Further out, a pick up in population growth would have a positive impact on consumption expenditure. Economic forecasters Access Economics and BIS Shrapnel forecast solid growth in Territory private consumption in the coming five years.


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