First the bad news. According to Deloitte, retail turnover has declined for two consecutive quarters and Queensland’s retail sector was the worst performer, falling 2.2 per cent for the March quarter compared with the national figure of 0.6 per cent.

Queensland’s state demand (a measure of the economy) was just 0.4 per cent in the first quarter. Consumption growth in Queensland was 2.5 per cent and Westpac said this was the worst of all the states, but that may be because the state did so well during the pandemic that there was less of the catch-up spending that occurred in other states.

“Households are clearly holding off on big ticket items,” Westpac’s Elliott Clarke said.

ANZ has also tagged the state’s economy as “slowing and below trend”.

Wilsons Stockbroking said consumer confidence in Australia was almost as bad as during Covid and it has tipped more profit downgrades to come for the sector.

“We expect a goods-spending recession in the near term,” Wilsons said in client report.

“Evidence shows wallet-spend is shifting from apparel and household goods to travel and entertainment. This is a negative for retailers.”

But there was also good news. The shift in consumer spending to travel could see Queensland benefit because of a spike in interest in the state as domestic travel destination.

Deloitte also saw light at the end of the tunnel.

“The further return of immigration, especially students coming back for semester two, could be the boost needed to get retail sales back to overall growth in 2023,” it said.

It has tipped retail turnover growth to almost double from 0.7 per cent to 1.3 per cent in 2024.

The Commonwealth Bank has also revealed that card spending rose in strongly in April and this may reflect the increase in immigration.

“The return to growth would be spurred by more people and also more open wallets. As inflation continues to track down there is expected to be a point in 2024 where real wage growth becomes positive again,” Deloitte partner David Rumbens said.

“This would not be a boom. Indeed, it’s still below the expected rate of population growth, but it is better than the recent picture of going backwards and the anticipation of sales growing again may allow the consumer and retailer sentiment to start improving towards the end of 2023.”

He said the June quarter was likely to be the last to show a decline in retail turnover.

“Interest rates may well be topping out soon and with wage growth pushing up and inflation pushing down, we are getting close to the point where will see real wage growth again.

“The retail recession to date confirms that households are feeling the pinch, whether it be mortgage holders or renters, and households are slowing their spending as a result. Additional rate rises through 2023 would tighten the screws that little bit further.”

Westpac said big ticket spending was being wound back and what spending there was appeared to be funded by savings that had accumulated during the pandemic.