Creating a position where consumers feel comfortable to spend money will be one of the biggest challenges for businesses in 2015.
Whyalla Chamber of Commerce and Industry president Ron Hay said confidence needed to be restored so consumers felt they had some certainty around their day-to-day lives, particularly in the area of their disposable income.
“If we look at the last 12 months, we have witnessed at both state and federal levels, budget announcements that have fuelled uncertainty and unrest amongst consumers and hence a contraction of spending in some instances,” Mr Hay said.
“Consumers are no different to business, in that they have to deal with the rising cost of living and when you add budget cutbacks, a lack of job security and other factors, people become less inclined to shop, as they take stock of their financial position and what disposable income they will have.”
Mr Hay said an indicator to having a good economy was where individuals and families had disposable income, for recreational purposes, home items, leisure and pleasure.
“I think this is going to be one of the major challenges going into 2015,” Mr Hay said.
“Improvements in the employment market would help to shift consumer focus on spending rather than saving for constant catch up.”
Mr Hay said it was his view that there were a number of economies within a country, such as national, state and local, with each being different.
“Whyalla has a base economy and my feeling is that it is relatively stable, based on our industry and activities within the region,” Mr Hay said.
Mr Hay said many businesses would be looking to the Reserve Bank (RBA) to set the tone for the year ahead through possible interest rate reductions, which could stimulate spending.
However on the other side of the coin, if we see further reductions in the value of our dollar, it may help certain sectors within our economy but overall our imports will cost more and hence the cost of these goods will go up to the consumer,” Mr Hay said.
“Consumers then potentially make conscious decisions to not purchase electronic goods, vehicles and those items that they may get another year or two out of, to save some money, thus weakening the retail market.”