Shopkeepers boosting margins

Australia’s shopkeepers have been gradually rebuilding their margins.

And they expect to keep doing so.

A business survey, conducted by the National Australia Bank, tracks both developments.

The survey showed both actual and expected retail margins plunged sharply after the global economic crisis struck last September. That gave many Australian shopkeepers a catastrophic Christmas.

But the Federal government’s stimulus package, which put extra money into many shoppers’ pockets and purses earlier this year, helped most shopkeepers recover at least some lost ground.

The Federal government’s decision to guarantee bank deposits is also helping Australia’s big four banks repair some of the damage that they, too, suffered as a result of the crisis.

They have not fully passed on the interest rate cuts that the Reserve Bank has made, in its marker rate, over the first half of this year.

But there are still big doubts ahead.

No-one yet knows, for example, whether Australian shoppers will stay as bold as they have been over recent months, now that the help they got from the first stage of the Federal government’s stimulus package is fading.

There is certainly some reason to doubt that, as both government and private forecasts suggest that Australia’s unemployment is likely to keep rising in the months ahead.

Surprisingly, though, the NAB’s June quarter business survey showed a sharp rise in business confidence throughout Australia over recent months.

That, however, must be kept in perspective.

Although business confidence leapt by 20 points during the quarter, it still stuck  at  minus four points.

Business conditions rose by 11 points, but it, too, stayed below zero at minus 9 points.