Spending drop signals rising imports

Expenditure on clothing, footwear and household textiles has fallen for the fifth consecutive year, a recent survey has shown.
The 2003/04 household expenditure survey - produced once every five years by TFIA Business Services, the commercial division of the Council of Textile and Fashion Industries of Australia (TFIA) - showed a steady decline in spending on clothing and footwear.
Over the audited period the category experienced a drop in its share of total household expenditure of 13.3 per cent, the largest drop of any of the broad categories of goods and services.
The results marked the fifth consecutive year in which expenditure in the category had slowed, said TFIA executive director Ashley Van Krieken.
"While the figures could point to some decline in demand it's far more likely that the fall is due to cheaper prices due to imported goods from China," he said.
Clothing and footwear reported price rises of 5.6 per cent, the lowest across the broad categories, compared to the highest rise of 29.1 per cent in the alcohol and tobacco category, meaning retailers battling rising fuel prices had to work harder to make their margins, he said.
"It's even harder for wholesalers, particularly because of the increase of direct sourcing for retailers."
The survey also showed that the lowest quintile of income earning households spent the greatest share of their income on clothing and footwear at 4.8 per cent while the highest quintile spent only 2.7 per cent.
Rural areas accounted for 32 per cent of total expenditure, while major cities apart from Sydney and Melbourne accounted for 26 per cent.
The age category of 35 to 54 reported the highest expenditure on clothing and footwear, a result described by Van Krieken as "surprising".
"Much younger or older people usually show the greatest expenditure, but it could be that the [35 to 54] age group is consuming clothing for their children," he said.
This could be accounted for by figures for children and infant's clothing, which - at 33.4 per cent - saw the largest growth of all the TCF categories.