Forecasts of Consumer Spending and Economic Gro...

Forecasts of Consumer Spending and Economic Growth

Forecasts of Consumer Spending and Economic Growth

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Not all Australians prefer lower interest rates.  Some prefer higher rates and some prefer no change.  This report is based on consumer survey tracking data and shows how interest rate preferences vary over time and by demographic.  It shows that interest rates have lost their power to influence aggregate consumer spending growth in this very low interest rate environment.  It also points to another way to boost consumer spending growth.


In his 2004 book “The Wisdom of Crowds”, James Surowiecki makes an interesting case that if you want to make a correct decision then large numbers of ordinary people can provide better advice than a small number of experts.  We have been researching this concept since 2005 and find that it is a potentially useful technique - but that applying it is rather more complex than suggested by Surowiecki.

We prefer the term "the wisdom of the masses" rather than crowds because the latter does not suggest sufficient diversity.

Consumer expectations have been found to be valuable for forecasting and predicting behaviour.  This includes economic and political outcomes.

The June 2019 survey indicates that the unemployment rate is unlikely to fall. Details of the leading indicator model for the unemployment rate are included in the report.

The report provides data on willingness to spend, the proportion of adults who feel they have discretionary funds, saving priorities, expectations about the economy, global warming, drought, petrol and electricity prices and the affordability of electric vehicles.


House prices are an important economic variable.  They are a major component of household wealth, a significant driver of consumer spending, and a hurdle for prospective first home buyers.  This report is based on a unique leading indicator of Australian house price inflation.


New vehicle sales forecasts for 2020 through to 2025.  Is there light at the end of the tunnel?

This report provides sales forecasts for 2020 to 2025 coupled with analysis of the reasons for the decline and their future implications.  The driving forces responsible include both demographic and economic factors.

The report also includes scenarios for recovery time.


Official economic forecasts for Australia have only recently been revised downwards, despite the signs of a significant slowdown which started emerging from mid-2018.  The outlook is for a challenging economic environment with only a slight improvement likely, as at May 2019.


The drivers of consumer spending in Australia are identified and quantified.  The outlook for 2018, along with some scenarios, are included in this report.


As we enter a new decade indicators point to sluggish consumer spending and economic growth.  Population growth may be slowing; consumers have become more pessimistic about the economy and business sentiment is subdued.

There are, however, some positive notes: rising house prices; and record-high consumer willingness to spend.  The former is good for new vehicle sales and the latter provides an opportunity for the government to significantly boost consumer spending via fiscal stimulus.

In addition, there are growth opportunities for some products and in some segments of the population.  Several such opportunities are identified in the report.


Retail sales growth scenarios for the next 18 months.  Identification and analysis of the key economic drivers, the impact of the imminent federal election, consumer spending sentiment, opportunity and threat.


As 2018 progressed, new vehicle sales slumped. Is this the start of Peak Car or is it a perfect storm? Our report analyses the causes of the slump.


Identifies the key drivers of spending on food (total of supermarkets, specialy food, and liquor).  Provides scenarios for growth in the year ahead.


Australia's economic growth rate has slumped, largely driven by slowing household consumption growth.  Are the current and planned monetary and fiscal policies up to the job of significantly lifting consumer spending growth?  The answer is no, because there is no stimulus for those consumers most willing to spend. 


Income tax cuts in 2019-20 will give a much needed boost to Australia's household disposable income.  But will consumers spend all the extra money and will the impact be enough to lift consumer spending out of its funk? 


There are periods when GDP forecasts are most likely to be inaccurate.  This report identifies such times and the factor which causes inaccuracy.


Apparent consumption of alcohol in Australia has declined in per capita terms since 1978 and is still falling.  Our analysis of the data has identified the main drivers of this decline.  These are both demographic and economic factors.

Our model projects that per capita consumption will continue to decline, but that total alcohol consumption is likely to grow slowly.  Projections extend to 2030.

The per capita decline in consumption may seem like a good health outcome, but it is not actually clear that we are drinking less.  The demographic and economic factors may be confusing us.


Consumer economic pessimism has increased in Australia as at late 2019, to the highest level since the Global Financial Crisis.  Why?  How can sentiment be turned around?  Our analysis has some surprising answers.


Low fossil fuel consumption vehicle sales are growing strongly, despite weak new vehicle sales overall.  This momentum is expected to continue given community concerns about climate change and the cost of living.  This report provides three scenarios for sales to 2030.


The recent increase in the number of first home buyers in Australia is set to continue into 2021.