The Westpac-Melbourne Institute’s Consumer Sentiment survey revealed a fall in consumer confidence at the April survey of 2.4 per cent. Consumer confidence has now been near record lows for two years, representing one of the longest lengths of time of consumer despondency since the survey began.

What should be of concern to retailers is the slump in the ‘time to buy a major item’ index, which was down 6.6 per cent month on month, and is now at record lows.

NAB’s Monthly Business Confidence survey showed a slight improvement in confidence, and a slight decrease in business conditions. On balance, however, businesses reported fairly steady conditions. Capacity utilisation – a very good leading indicator of employment conditions – continued to slowly ease downwards.

It would appear that businesses that either directly sell or supply the discretionary retail and food and beverage sectors will continue to experience very tough trading conditions as the year progresses. It is unlikely that consumers will feel any genuine financial relief until two or three drops to the cash rate, and it looks increasingly like we won’t reach that stage in Australia until early 2024. In better news, businesses are not nearly as pessimistic as consumers, driven by those non-retail businesses that have not experienced such an extreme fall in demand.

CreditorWatch notes that external administrations are already well above pre-pandemic levels, and are forecast to increase as consumer conditions remain very challenging and impacts continue to flow through the business community.