GfK: Exchange rate and declining value dampen technical spend

Exchange rate fluctuations and the declining value of goods are further dampening money spent on technical consumer goods, a new report indicated.

A hold on interest rate increases mixed with a strong labour market, and rapid price deflation, resulted in a 5.5 per cent decline in the overall value of the technical consumer goods industry, according to the GfK TEMAX report.

It has also been exacerbated by the continuing strength of the Australian dollar against the greenback.

Despite this, IT was the only sector delivering significant growth at 8.7 per cent in the third quarter. This includes products such as notebooks and PCs. But along with other sectors, it did not escape the decline in average prices.

GfK senior IT manager, Kathleen Lonergan, said compared to the same time last year, notebook prices had deflated by about 20 per cent. Storage prices also fell about 17 per cent.

“The biggest contributing factor is the exchange rate fluctuations, but prices have been fairly steady since December 09, when the Australian dollar began rising,” Lonergan said.

After experiencing its first ever decline in the second quarter, notebooks have managed to accrue 9 per cent growth in Q3.

The report indicated that desktop PCs grew 16 per cent in value and the storage category attracted 24 per cent growth. Gfk said there was almost one external storage drive sold, for every PC that passed through the register.

Lonergan said it would be interesting to see how devices like the iPad, Samsung’s Galaxy and eReaders, will affect product categories such as PCs and notebooks.

The consumer electronics sector, which includes flat panel TVs, accounted for 60 per cent of value sales. The overall sector had declined by 18 per cent; with unit growth beginning to slide further by about 19 per cent in Q3.

Smartphone market was boosted by touch-only devices, which moved from 44 per cent in Q3 2009 up to 66 per cent of all mobile phones sold in Q3 2010. But prices of smartphones have declined 25 per cent and price of mobile phones were halving.

“It’s unlikely that value growth will return to the majority of these sectors in the coming quarter,” the report said. “One year on, it will be a challenge to match last year’s spend, particularly in light of the threat of renewed interest rate rises"

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