Poor retail sales take toll on printers

Internal research conducted by Printing Industries points to a major deterioration in industry trading conditions during the June 2008 quarter has been supported by the Australian Bureau of Statistics (ABS) estimates of poor retail trade turnover for May 2008.

The estimates show that turnover increased by a modest 0.1 per cent compared with the previous month.

On a trend basis NSW reported no change while Victoria reported a deterioration. The remaining states and territories reported modest improvements in retail trade turnover.

Printing Industries national manager for policy and government affairs, Hagop Tchamkertenian, said the downward trend in retail trade turnover was a concern.

"With the retail trade sector accounting for almost 18 per cent of printing industry sales it is no wonder that it continues to be an economic lifeline for so many printing companies," he said.

Hagop said the recent period of interest rate increases coupled with other consumer confidence shattering developments such as the falling share market and rising petrol prices were combining negatively to impact on household budgets and general consumer confidence.

 "When consumers get nervous the consequences are generally dire for the printing industry. This is because if we start including sectors dependent on consumer spending, we are including sectors that account for more than 60 per cent of printing industry sales," he said.

Hagop also said the 'bad news' retail trade turnover figures followed some 'good news' on the economic front with yesterdays decision by the Reserve Bank of Australia (RBA) to leave official interest rates unchanged.

"The brief statement released yesterday by the RBA essentially states that the recent increases in interest rates seem to be working. Consumer demand has moderated and credit expansion to households and businesses has weakened significantly.

"So it's a case of on one hand good news, official interest rates are unlikely to rise in the short term, but on the other hand bad news because the RBA expects the moderating trend in consumer demand to continue," he said.