Consumer confidence has plunged along with the Austalian dollar. At one stage on Wednesday the dollar hit $0.67 yet despite this both Sharp and Pansonic cut the price of their flat panel displays to retailers.
Len Wallis of Len Wallis Audio said “I was surprised that amongst all this turmoil and a sliding dollar manufacturers like Sharp and Panasonic are delivering price cuts.”
Earlier in the day the Westpac-Melbourne Institute reported that the consumer sentiment index dived 11 per cent, or 10.2 points, to 82.0 in October, more than reversing September’s 7 per cent bounce and left the index down 28.9 per cent on October last year.
Reuters reported that the survey was taken before Tuesday’s aggressive cut in interest rates by the Reserve bank of Australia (RBA), which should help confidence going forward. The central bank reduced its main cash rate by one percentage point to six per cent, the biggest cut in 16 years and twice what analysts expected. “The survey results are therefore relevant for assessing the confidence of consumers prior to this stunning good news,” Westpac’s chief economist Bill Evans said, referring to the rate cut.
In the press release issed by Westpac Evans said “As indicated by the double digit fall in the Index a strong positive message was required from the Reserve Bank.” The extent of consumer unease last week was shown in responses to the question of whether it was a good time to buy a major household item. That index sank 19.7 per cent to the lowest since the survey began in 1975.
“That is sending a chilling message to retailers as we approach the Christmas season,” Mr Evans said. The survey of 1,200 people was taken between September 30 and October 5.
Consumers were clearly worried about the economy with the index measuring economic conditions over the next 12 months falling 20.2 per cent in October. The measure of economic conditions over the next five years dropped 9.1 per cent.
Despite a downturn in consumer confidence Canon has said that between January-June of this year conumers in Australia spent a whopping $2.424B on digital technologies the highest figure ever for this period. They have also forcast up to $3.6 billion more sales in the second half.
Their figures are among the findings from the latest CDLI and illustrate continued growth in digital technology categories and the importance of digital technology in Australian consumers’ lives. The CDLI is independent research commissioned by Canon and compiled by GfK using information on sales figures (units and dollar value) provided by GfK’s retail audit panel.
“The Australian technology industry is still expanding, experiencing higher sales growth than the retail industry sector as a whole,” said Darren Ryan, Marketing Manager for Canon’s Consumer Imaging Products Group. “I believe the trend can be attributed to the importance of digital technology in our lives ? there’s growing need for consumers to have the latest technology and it’s now more accessible than ever.”
The growth from the latest CDLI report was even higher than the corresponding period in 2007, with total sales values for products covered by the CDLI increasing by 12.1%. At this rate and based on second-half trends that take into account the Christmas period, Canon foresees a record spend of 5.5 to 6 billion dollars by the end of 2008.
