Consumer spending hits services sector
(15 November 2011 — Australia) Data released on Friday by Westpac showed that key parts of Australia’s services sector have been hit by a slowdown in consumer spending.
Figures released by Westpac, the second biggest lender, showed the well-publicised impact on the retail industry has spread to hotels, the construction industry and the finance and insurance sectors.
Cafes and restaurants have suffered as consumers have closed their wallets and concentrated on paying down debt.
Along with hotels, with which they are bracketed, food outlets have incurred one of the biggest jumps in percentage terms in the number of impaired loans and bad debts incurred by Westpac over the 12 months to the end of September this year.
The figures cover 14 major sectors of the economy including property, manufacturing and mining.
Westpac released the data as part of its compliance and risk lending rules, showing impaired loans run up by the hotel and food hospitality sector had risen to A$71 million to A$205 million.
Big increases in impaired loans year on year were recorded by construction companies (up A$69 million to A$180 million) and the finance and insurance industries (a rise of A$63 million to A$213 million). Westpac has also raised its specific provisions for likely loan losses for those sectors.
Sectors such as health and recreational services, wholesale trade and even gas, water, electricity and telecommunication providers have also all been hit. Westpac saw the total amount of impaired loans racked up by those three categories rise from A$220 million to A$614 million over the year to 30 September.
The bank raised its provisioning levels for two of those sectors though reduced its cover for utility providers given the probability that they would recover their own debts.
Actual loan losses in the 12 months jumped by A$567 million to A$1.86 billion as Westpac wiped the slate on its lending to the troubled property sector.
Cafes and restaurants have suffered as consumers have closed their wallets and concentrated on paying down debt.
Along with hotels, with which they are bracketed, food outlets have incurred one of the biggest jumps in percentage terms in the number of impaired loans and bad debts incurred by Westpac over the 12 months to the end of September this year.
The figures cover 14 major sectors of the economy including property, manufacturing and mining.
Westpac released the data as part of its compliance and risk lending rules, showing impaired loans run up by the hotel and food hospitality sector had risen to A$71 million to A$205 million.
Big increases in impaired loans year on year were recorded by construction companies (up A$69 million to A$180 million) and the finance and insurance industries (a rise of A$63 million to A$213 million). Westpac has also raised its specific provisions for likely loan losses for those sectors.
Sectors such as health and recreational services, wholesale trade and even gas, water, electricity and telecommunication providers have also all been hit. Westpac saw the total amount of impaired loans racked up by those three categories rise from A$220 million to A$614 million over the year to 30 September.
The bank raised its provisioning levels for two of those sectors though reduced its cover for utility providers given the probability that they would recover their own debts.
Actual loan losses in the 12 months jumped by A$567 million to A$1.86 billion as Westpac wiped the slate on its lending to the troubled property sector.
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