Caution is the key word for apparel retail sales in the US for 2008.
Sentiment about the US economy in 2008 has changed from optimism to pessimism. Concern continues among analysts that the US economy will go into recession in 2008. The problems with the sub-prime debt market and, in particular, the steep decline in the housing market are the drivers for this. On top of these concerns, rising fuel prices and rising unemployment are also a concern for consumers.
US consumer spending, which accounts for a high proportion of the US economy, will be a major player in the outcome for 2008. Even though consumer spending in the US has been remarkably resilient over the past few years, house prices (a good indicator of consumers propensity to spend) in the US have stalled or, in some regions, have started to fall. As a result, consumers in the US may begin to reduce their spending across all items, including apparel.
Despite these concerns, apparel retail sales data from the US shows that growth continued up until November 2007, and was stronger than for most other key wool consuming countries, with the exception of China.
Nonetheless, the signs that a slow-down may be imminent are definitely there with consumer confidence in the US falling in recent months and retail sales not positive for December 2007.
Australian Wool Innovation Limited
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