Household consumption spending growth (volume) is weak and retail sales growth ($) continues to weaken. This has been largely caused by slowing household income growth. Real per capita income growth is in recession.
Willingness to spend is quite high, so lifting income growth should lead to recovery of consumer spending growth. But how is higher income growth to be achieved?
The current hope is that recent strong employment growth will result in sustainably higher wages growth. This is not happening, so should the federal government have a fiscal stimulus ready as a contingency?
This report dissects willingness and ability to spend by broad age group as a guide for fiscal stimulus and as a basis for consumer marketing strategy in a low income environment.
The data analysed includes unique tracking surveys conducted by foreseechange since 2003 and the recently released Household Expenditure Survey conducted by the Australian Bureau of Statistics.
Four scenarios for future consumer spending growth have been developed as a basis for contingency plans.
Failure to develop contingency plans could lead to an economic recession and even weaker growth for consumer marketing organisations.