A NUMBER of industry sectors lost out this year in the drama of volatile global markets and the high value of the Australian dollar, with tourism, hospitality, retail and residential construction among those that suffered the most.
Retail, hospitality and tourism were all dogged by low discretionary spending rates thanks to uncertainty in the marketplace.
Shares in discretionary consumer stocks have been hammered this year and were down again this week, including Billabong losing a whopping 40 per cent, David Jones (9.1 per cent), Myer (6.2 per cent) and Harvey Norman (8.7 per cent).
The year was peppered with headlines involving retail veteran Harvey Norman founder Gerry Harvey, who claimed the industry was suffering under a surging online segment, which is not paying GST.
Mr Harvey led the charge on the issue, lobbying to have GST attached to overseas purchases below $1,000 made on the internet and said that, without it, the sector was not operating on a level playing field.
The Australian dollar reaching parity during the year and remained strong, fuelling internet shopping and international travel by Australians.
But the jury is out on the overall economic impact for tourism to the country.
Reports earlier this month showed international tourism to Western Australia was up 8.2 per cent since September 2010 and, according to Tourism Australia chairman Geoff Dixon, the high dollar is not hurting tourism operators as much as is commonly believed.
“Be assured, the competitive price of an airfare is a bigger factor in destination choice than the value of our currency,” Mr Dixon said in November.
Interstate leisure visitors declined 29.6 per cent over the past year, according to the latest research by Tourism Research Australia.
The National Visitor Survey showed interstate visitors to WA dropped from 385,000 to 271,000 over the 12 months to September 2011.
The state’s hospitality industry has also laboured under the increased costs of electricity, food and wages. This has made cost recovery difficult for the sector, which has been worsened by the same discretionary spend issues felt by the retail industry.
The construction industry has endured a tough year as development money stays largely on the sidelines. The Australian Industry Group/Housing Industry Association performance of construction index’s reading of 39.6 points shows the industry is continuing to contract, albeit at a slower rate in November.
But, according to the PCI, the index of new orders rose 6.7 points to 38.6 while house-building activity also rose to 38.6.
Engineering construction rose to 45.6 points but apartment building and commercial construction both declined to 23.4 and 28.3 respectively.
“There’s no hiding from the fact that house-building activity has contracted for 18 straight months and apartment building activity has now contracted for 19 straight months,” Housing Industry Association senior economist Andrew Harvey said.
Australian Bureau of Statistics data from earlier this month showed total dwelling commencements dropped 11.5 per cent in the year to September. In the September quarter they fell 6.8 per cent from the June quarter to 35,672 units.
WA was below the national average with a decline of 5 per cent. CommSec economist Savanth Sebastian said the data painted a picture of a housing sector that was “going nowhere”.
“Activity levels have dried up, with potential home buyers remaining on the sidelines,” Mr Sebastian said.