The economy is lukewarm to tepid, but not dead.

For a country supposedly in the middle of an economic crisis so grave that it cannot be described without the obligatory passing mention of the Great Depression, yesterday’s ABS retail turnover figures were hardly the stuff of nightmares.

At worst, the national economy appears to be treading water. At best, the national economy appears to be treading water. We might not actually be going anywhere, but it’s a pretty good outcome when you consider that expectations play a sizeable role when it comes to the willingness of people to open their wallets, and the last 6 months of media coverage framing those expectations has been the equivalent of some nutter standing on the corner banging on about the end of the world being nigh.

Sandwich board wearer-in-chief Michael Stutchbury was at it again this morning with his News is All Bad spiel, as if we all hadn’t heard why we should be hiding in caves hoarding tins of baked beans a hundred times before. The problem is, even though we keep being told about the imminent economic plunge into the toilet, the economic data from the real economy continues to defy the Armageddonists — last time it was unemployment data, this time it’s retail.

Retail turnover data is the least worst measure we have when it comes to the rubber hitting the road of the real economy in terms of how money is flowing out of people’s wallets and into the nation’s cash registers. What it shows at its most basic level is that some States are faring better than others as the financial crisis has increased the spread of retail activity between States, highlighting the disparity in economic activity driven by regional factors across Australia.

NSW is taking a big hit with a sizeable contraction in retail turnover, continuing on with their determined effort to make the Japanese economic experience of the early 90’s the new black, while the rest of the country is grinding along in a not too dissimilar fashion to 2005.

If NSW wasn’t such a basket-case, the national figures would be looking quite spiffy all things considered. We don’t so much have an economic crisis as we a NSW crisis.

The other piece of data that appears to be feeding into the pervasive Hanrahan narrative comes from the retail turnover figures by industry:

The media savvy Households Goods sector is continuing their long downward slide that started well before the financial crisis nearly two years ago, back when people thought “sub prime” was a character from the cartoon series The Transformers — which is an interesting aside when you think about it — they had Deceptocons too, although now days we just call them ratings agencies.

The big household goods retailers are a well oiled machine when it comes to letting others feel their pain, behind only the real estate industry when it comes to professional sympathy pleaders. With neither in particularly good shape at the moment, in fact being in worse shape than just about everyone else except the finance sector, maybe we all need to have a bit of a cold shower and realise that their current economic experience isn’t shared among the broader economy. Economies are driven by more than just the number of washing machines and LCD televisions walking out the door — they are diverse, even if the economic commentary is not.

With large a large chunk of the misery merchants in the media residing in Sydney (along with large chunks of the worst performing industry sectors at the moment like finance), one has to wonder just how much value there is in the sort of Sydney chauvinism driving the economic narrative, where taking sources from the worst performing industries in the worst performing State and treating their experiences as being somehow representative of the economy as a whole?

With the retail turnover figures suggesting we’re treading water, it’s understandable why the NAB reduced their GDP growth forecasts, the real economy appears to likewise be treading water as a whole, but the one thing the numbers do not suggest is anything remotely approaching the Great Depression. If we can pull these figures out with expectations being driven into the ground by misery merchants, we could probably do a hell of a lot better if we didn’t face a daily barrage of mostly recycled doom and gloom churned out of the media sausage factory.

Ken Henry was right – a few people in this country need to lighten the f*** up.

Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.


Peter Fray
Editor-in-chief of Crikey