Business conditions rosy but consumers ‘very pessimistic’

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Above-average trading conditions pushed measures of business confidence higher in August, but rate rises are dampening consumers’ willingness to spend money.

Above-average trading conditions and profitability pushed measures of business confidence higher in August, but successive rate rises by the Reserve Bank are dampening consumers’ willingness to spend money on non-essentials, new data shows.

NAB group chief economist Alan Oster said buoyant demand meant firms were passing higher costs through to consumers. Retail prices rose a further 3.3 per cent in the three months to August.Advertisement Commonwealth Bank chief economist Stephen Halmarick expects household spending to soften in the months ahead as higher interest rates reduce disposable income.

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Business conditions rosy but consumers ‘very pessimistic’Above-average trading conditions pushed measures of business confidence higher in August, but rate rises are dampening consumers’ willingness to spend money.
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