Regional Business Review

1
Regional BusinessReview

• 3rd Annual Business Dinner
• James Hardie Dining Room
• Charles Sturt University
• Prepared by the
• Western Research Institute
• 22nd March 2004

2
Outline

• Regional Economy
• National Retail Industry
• Regional Retail Sector
• Changes in Central West Retail
• Key drivers and success factors
• Retail Outlook
• General Economic Outlook

3
National and Regional
Australia Central West
Economic Growth 3.5 pa N/a
Unemployment 5.8 5.1
Population Growth 1.2 pa 0.1 pa
Source Australian Bureau of Statistics
4
Sales Performance

• Source Regional Business Survey sponsored by the
  Central Western Regional Development Board and
  Country Energy

5
Regional Comparison

• Source Regional Business Survey sponsored by the
  Central Western Regional Development Board and
  Country Energy

6
Sector Comparison

• Source December quarter Regional Business Survey
  sponsored by the Central Western Regional
  Development Board and Country Energy

7
Significance of Retail
Australia Central West
Value Added 34 billion 325 million
Employment 1.3 million 10,300
Sources ABS and WRI Input Output Table
8
Retail Employment Profile

• 12 of Australian workforce
• 60 female
• 50 of all young people with a job work in retail
• Two-thirds are casual / part-time
• 25 of employment flow-on effects captured by
  retail

• Source Retail Industry Profile prepared by the
  Australian Retailers Association

9
Retail Sales Performance

• Source Regional Retail Survey sponsored by
  Reliance Credit Union

10
Regional Comparison

• Source Regional Retail Survey sponsored by
  Reliance Credit Union

11
Sector Comparison

• Source Regional Retail Survey sponsored by
  Reliance Credit Union

12
Retail Shift Share Analysis

• Analysed job growth 1996-2001
• Looking for sectors growing above state
  industry averages
• Outperforming retail sectors
• Specialised food 23
• Furniture houseware 71
• Other Personal household 46

• Source Central West Shift-Share Analysis
  commissioned by the Central Western Regional
  Development Board

13
Building Approvals

• Source Australian Bureau of Statistics

14
Key Industry Drivers

• Level of consumer confidence
• Rate of household formation
• Level changes in interest rates
• Population growth
• Economic growth
• Household disposable income

• Source IBISWorld

15
Key Success Factors

• Good product offering
• Loyal customer base
• Clear market position
• Superior after sales service
• Access to latest technologies
• Economies of scale
• Proximity to key markets

• Source IBISWorld

16
Retail Outlook

• Retailer expectations slightly lower for March
  quarter of 2004
• Long run average sales 4
• MONASH 1.8 in 2004-05
• Higher AUD increases demand for imported cars,
  electronics, etc
• Increased competition for market share

17
Growth Outlook
Sector Central West Share Growth in 2004
Primary 21 9.4
Secondary 18 - 0.9
Tertiary 14 3.0
Quaternary 29 3.4
Quinary 6 4.2
Total 3.5
Sources Business Review Weekly State of the
Nation 2004 and WRI Input-Output Table
18
General Economic Outlook

• Business expectations higher for March quarter of
  2004
• Rebound in farm production
• Slowdown in housing market
• Strong domestic economy
• AUD forecasts 65.8c to 80c US
• Possibly higher interest rates
• Low inflation in RBA 2-3 range