Alan Oster


THE NEWS WRAP: Turnbull claims 300,000 properties will miss out if NBN plan doesn’t change

4:21PM | Tuesday, 8 April

Communications Minister Malcolm Turnbull is set to claim up to 300,000 premises outside the NBN’s fixed line footprint will miss out on broadband without changes, in a speech to be delivered today.   In a speech to be delivered at the CommsDay conference in Sydney, leaked to Fairfax Media’s Matthew Knott, Turnbull will say that the number of properties requiring a satellite or fixed wireless connection has been dramatically underestimated.   “The problems mean that without policy changes, the project as planned would not be able to service an estimated 200,000 to 300,000 premises outside of the fixed line footprint,” Turnbull will say.   “If the NBN were to take steps to eliminate the 'coverage gap', the company faces a deterioration of operating cash flows of its satellite and fixed wireless networks of up to $1.2 billion by 2021.”   Twitter unveils user profile redesign   Twitter has unveiled a redesign of its user profile pages, with the changes coming in response to new user growth hitting an all-time low during the last quarter.   The features, currently available to a select number of users, include the ability to pin posts to the top of a users’ feed, as well as the introduction of Facebook-style banners and larger profile pictures.   Business confidence falls as conditions improve   Business confidence fell to its lowest level since the federal election during March, despite an improvement in business conditions, according to the latest NAB Monthly Business Survey.   The survey shows that while conditions improved from zero points to one, confidence fell to a score of four, down from seven in February and nine in January.   “It appears as though firms are responding to the ongoing sluggishness in business activity, which has not quite reflected the exuberance of firms in past months," NAB chief economist Alan Oster says.   “The stubbornly high Australian dollar, uncertainty over the global economy and the potential for significant 'belt tightening' in the upcoming budget, could all have contributed as well.”   Overnight   The Dow Jones Industrial Average is up to 16256.1. The Aussie dollar is down to US93.61 cents.

THE NEWS WRAP: Slowdown in business confidence growth during November

12:35PM | Tuesday, 10 December

There has been a slight tempering in business confidence following a post-election surge, according to the latest NAB survey.   The index fell to five points in November, after hitting six points in October.   A score above zero suggests confidence is improving, with higher readings suggesting a faster rate of improvement.   “People are starting to see that changing the government doesn't change the economic activity levels. The other thing that also doesn't help is that our employment confidence was quite weak. And so that was offsetting some of the better trading conditions we were seeing,” NAB chief economist Alan Oster says.   General Motors names its first female CEO   General Motors is set to become the first US automaker to be run by a woman, after naming its global product development chief, Mary Barra, as its new chief executive.   Barra will be the company’s fifth chief executive since US President Barack Obama forced out Rick Wagoner in 2009, and replaces Dan Akerson, who is standing aside after learning his wife had an advanced stage of cancer.   “This is an executive who has a vision of where she wants to take the organisation. [Barra] is an adaptive personality and one who reacts to change well,” Akerson says.   Qantas shares nose-dive to a record low as Abbott rejects bailout   Qantas shares hit a new record low of just 96.5 cents, after the airline’s announcement it is expecting a first-half loss of $300 million, prompting ratings agencies to downgrade its debt to junk bond status.   The airline has since announced plans to slash 1000 jobs over the next 12 months.   However, despite calls from Qantas executives, Labor and trade unions to provide the struggling carrier with subsidies, saying that a bailout would risk creating a “bottomless pit” for taxpayers.   Overnight   The Dow Jones Industrial Average is down to 5146.2. The Aussie dollar is up to US91.61 cents.

Australia's love affair with online shopping continues, but growth is slowing

12:42PM | Thursday, 5 December

Australians' love affair with online retailing has continued but the pace of growth has slowed and the value of the transactions has shrunk considerably.   Figures in the latest National Australia Bank Online Retail Sales Index showed that Australians spent $14.4 billion in on retailing in the year to October 2013 - up $2 billion on the same period last year. But sales growth slowed considerably over the past three months, with month to month growth of just 0.3% in October, and the year-on-year rate at 10.6% - the second lowest after August 2013.   However, it was the analysis beyond the headline number which was the most compelling and the findings are significant as we head into the crucial Christmas trading period.   NAB’s analysis revealed that almost 90% of all online transactions in the past year were for products under $100. That compares to less than 3% of transactions with values of over $250 and just 0.2% of online sales were for purchases over $1,000.   NAB Chief Economist Alan Oster said “retailers cutting prices to build sales volume, changes to shipping arrangements and a significant increase in people purchasing low cost media products like e-books, movies and music online are factors driving the lower transaction sizes.”   “While areas like homes and appliances and fashion have seen declines in the average transaction size, the groceries and liquor, and personal and recreational goods sectors have experienced an upward trend since early 2010.”   Since January 2010, the average online transaction size has also fallen from $64 to $41 in October 2013.   On what all this means for the GST debate around lowering the threshold, the NAB report found that in the year to October 2013, international online retail sales were around $3.9 billion, with almost 90% of those transactions below $100 in value.   "Our calculations show that had a lower GST threshold been set over the past year, it would have yielded additional revenue of $42 million at a $500 limit, $210 million at a $100 limit, and $309 million if the threshold was $25", it said.   Mr Oster said that the special report demonstrated that not only were the majority of online purchases in the very low value range, in fact 49% of all online purchases were below $10. “Transaction sizes for international retailers in particular have fallen quite dramatically over the last three years. Between January 2010 and October 2013 average purchase size dropped from $74 to $38.”   But he emphasised that the drop wasn't equal across all sectors.   Looking at the spending pattern of the various states, it said that on a per capita basis, the ACT, Northern Territory and Western Australia continue to record stronger levels of consumption, while South Australia, Victoria and Queensland lag behind.   The biggest spenders were aged between 35 to 44.   This article first appeared on Property Observer.

THE NEWS WRAP: US government shutdown looms closer

9:34PM | Monday, 30 September

The United States is one step closer to a government shutdown after Democrats rejected a proposal by Republicans to delay the Affordable Care Act by one year in exchange for passing temporary funding for the US federal government.   Failure to pass a funding bill by midnight – 2pm AEST – would see thousands of US government employees forced to take unpaid leave.   “One faction of one party in one house of Congress in one branch of government doesn't get to shut down the entire government just to refight the results of an election,” US President Barack Obama says.   “Congress needs to keep our government open, needs to pay our bills on time, and never, ever threaten the full faith and credit of the United States of America.”   Online sales growth slips in August   Online sales slipped by 0.1% during August to an annual growth rate of 9.6%, the slowest since 2010, according to new NAB figures.   The figures also show that online sales now equate to 6.2% of spending in traditional retailers.   “What we're also seeing is weakness just about everywhere, but particularly in fashion, which is one of our largest sub-sectors online," NAB chief economist Alan Oster says.   “I think what you're really seeing is weak levels of retail sales and that's being affected both in the traditional sales and online.”   Alan Kohler pulls the plug on Inside Business   Alan Kohler is stepping aside from the ABC’s Inside Business program after 12 years on air, citing the “ridiculous workload” created by the program in addition to his other commitments.   ‘‘I’ve been doing Inside Business for 12 years, it really has been great. I’ve really enjoyed it. I designed the program, started it off, had fantastic people working on it,” Kohler says.   ‘‘I really enjoyed doing the TV interviews, so I’m going to miss that. I’d like to find a way to continue doing interviews, if I can.’’   The national broadcaster says it remains committed to its business news coverage, despite the Sunday morning business news program ending its run on December 1.   Overnight   The Dow Jones Industrial Average is down 0.84% to 15129.67. The Aussie dollar is up to US93.26 cents.

Online retail sales surge in April

5:29AM | Friday, 31 May

The latest data for online retail sales have shown once again the digital world is faring better than bricks-and-mortar, providing some hope despite recent lacklustre industry results.   The results from NAB comes alongside complaints earlier this week from the retail industry that an unseasonably warm autumn has caused a build-up of winter stock among some retailers, which will be forced to sell at a discount.   The latest NAB statistics show Australians spent $13.5 billion online in the year to April, equivalent to about 6% of bricks-and-mortar spending.   After a dip in March, April recorded 23% growth year-on-year for online sales, with the strongest growth recorded in fashion, daily deals and media – three industries which have typically recorded strong online spending.   Strongest spending per capita was recorded among those aged between 25 to 54 years old, with residents in the Australian Capital Territory, Northern Territory and Western Australia. Regional WA has recorded the highest growth rate for per capita spending.   NAB chief economist Alan Oster said in the bank's report it was "encouraging" to see a gradual lift among retail sentiment in April, and noted online sales represent 6% of all spending, up from 5.2% at the same time last year.   "While we're seeing businesses take a multi-channel approach by developing an online presence alongside a traditional storefront, growth rates among businesses remains mixed," he said.   "However, encouragingly, online sales have grown by over $2 billion in the past year, evidence that retailers are becoming more sophisticated in how they engage with their customers."   Based on the share of spend, department and variety stores took the biggest slice at 36%, which coincides with David Jones' announcement this week that online sales have continued to grow well.   Homewares and appliances followed at 18%, followed by groceries and liquor at 14% and media at 11%. Games and toys were the smallest group for total spending, at just 2%.   Once again, domestic retailers dominated spending with 72% of all money spent, slightly below the average level of last year but above the low of 71% in July 2012.   But the growth in spending isn't the only positive. Telsyte senior analyst Sam Yip told SmartCompany not only is spending increasing, but average spending has increased as well.   "We're seeing the average price point increase, so we're seeing people spend more on high-price travel deals and restaurants and so on."   Daily deals sites, which are regularly some of the most popular online retail destinations, have been experimenting with more pricey travel products.   Yip also points to the share of spending being directed towards department stores, saying while the increase in spending is encouraging, department stores still lag behind the rest of the industry.   "It is encouraging, but the scale is quite small. These sorts of companies need to realise they can operate significantly differently from their bricks-and-mortar operations."   "Once you move online, it's all about range."   This story first appeared on SmartCompany.

Online sales growth takes seasonal December slip

3:59AM | Friday, 15 March

Online retail growth took a dip in December compared to the previous month, according to new figures, but an economist has played down concerns that eCommerce spending is on the slide.

Gen X pips Boomers to lead online retail spending

3:13AM | Monday, 11 March

Generation X remains the key generational group for online spending, according to analysis by NAB, with an industry expert attributing the finding to Gen X’s easy access to technology.

Just one in 10 local business leaders consider themselves stressed: Survey

2:50AM | Wednesday, 22 February

Fewer than 15% of Australian business leaders consider themselves stressed, new research shows, as the latest National Australian Bank survey reveals small- to medium-sized enterprises reported improved confidence in the December quarter.

GDP suffers biggest quarterly contraction in 20 years

6:53AM | Wednesday, 1 June

The Australian economy has suffered its biggest quarterly contraction in 20 years, with gross domestic product falling 1.2% in the March quarter, according to the Australian Bureau of Statistics.

Melbourne dominates commercial property market

2:39AM | Thursday, 3 February

Victoria continues to be the strongest property market in Australia, with NAB’s Commercial Property Index revealing Melbourne leads the way in the retail, office and industrial markets.

South Australian start-ups ahead of the pack

1:21AM | Friday, 14 January

Start-ups in South Australia are best-placed for success, according to a new survey, with the state notching up the strongest business conditions in Australia.

Budding start-ups must avoid interest rate-hit sectors: NAB

12:24PM | Sunday, 5 December

People looking to start a business should steer clear of the housing, wholesale and retail sectors due to their dependence on interest rates, according to NAB’s chief economist.