A slump in consumer confidence has left dealers hurting.
The ANZ-Roy Morgan Consumer Confidence Index for the week to May 16 saw a dip of 2.6 points to 109.4 -its lowest level since September 2015.
That result is reflected in recent half-year financial results posted by the country’s two biggest dealer groups – AP Eagers and AHG.
AP Eagers is predicting a 7% to 9% profit downgrade, while AHG is forecasting an 8.4% to 10.4% drop.
“People are a lot more cautious,” Tony Farnham an economist at Patersons Securities told the Sydney Morning Herald.
“There’s not going to be an outbreak of, or surge in retail sales.”
Meanwhile, head of Australian economics at ANZ, David Plank says lower spending is here to stay even if job growth accelerates.
He expects data to be released next week will show retail sales in April rose just 0.2%, after falling for two-straight months.
“Households now believe the slowdown in wage growth is permanent,” Plank says.
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