1 July 2010

Figures released today by the Australian Bureau of Statistics (ABS) reveal a decline in local retail trade and a rise in building approvals, according to the State’s leading business membership organisation, Business SA.

Retail turnover in South Australia for May 2010 was 0.9 per cent lower (seasonally adjusted) than the previous month’s figures.

This compares to the national retail turnover which increased 0.2 per cent during the same month.

Business SA Chief Executive Officer, Peter Vaughan, said that consumers do not have the confidence to spend.

“South Australia had the largest decrease in retail trade in May, confirming the pressures being faced by local businesses,” said Mr Vaughan.

“Retail spending has suffered from premature interest rate rises and businesses have been unable to build any momentum.

“Data indicates that the local economy has softened since March and there are more challenges that lie ahead for the business community.

“Consumers are remaining cautious with discretionary spending and stimulus payments have dried up, while pressures still remain.”

Local building approval figures went against the national trend with a significant increase in May 2010.

Data revealed that South Australian building approvals increased by a seasonally adjusted 30.6 per cent in May. This was against the national trend which saw a decrease of 6.6 per cent.

Approvals for private housing in South Australia decreased by 0.3 per cent, while national figures increased 1.7 per cent.

“The increase in local building approvals is good news, following a decline throughout the rest of the country,” Mr Vaughan said.

“However the rise in building approvals in May follows a similar decrease from the previous month and could be viewed as somewhat of an adjustment.

“The national data certainly does not justify the six interest rate rises that businesses and families have been hit with since late last year.

“Building confidence is heavily dependent on interest rates and the impact of premature interest rate rises is clearly evident.”