There is obviously much concern around the world about the impact on the economies around the world of the COVID-19 lockdowns and restrictions, and the likely huge impact on retail sales, and what this may mean for raw wool demand. Because Government data is lagged, it is too early yet to know the extent of the damage in Europe and North America, as well as here in Australia. However, consumer confidence provides an advance indication of what may happen to economies and, in particular, to retail sales. Consumer confidence has slumped in all of the major wool consuming countries and regions. The drop has been particularly sharp in Japan and South Korea. Consumer confidence in China is much lower in February (the latest month available), but perhaps it hasn’t fallen as much as you might expect. While consumer confidence has fallen in the US, it remains higher than before 2017. Confidence among consumers in the EU has dropped to the lowest since 2014. It masks what is happening in Italy, the epicentre of the COVID-19 epidemic in Europe, where consumer confidence is fast disappearing. No doubt we will see further declines this month, particularly elsewhere in Europe where COVID-19 has taken hold. These lower consumer confidence levels will translate into lower retail sales of items such as clothing.
Further details, including a chart showing the trends in consumer confidence in the major wool consuming countries, is given in this week’s edition of the NCWSBA Weekly Newsletter. Available to members.