Australian wool garment sales had a tough 2009 in Europe, with exports to Italy down 72.7 per cent for period July to November 2009 compared to previous year.

This was due to the global financial crisis, which crippled consumer spending.

However, some of wool's big customers are showing signs that the doldrum days might be over with United Kingdom retail sales across the board up 6pc on a like-for-like basis from December 2008, when sales dropped by 1.4pc.

In the British Retail Consortium’s (BRCs) 2010 Concerns Snapshot survey released this week, a third of its members said they would increase investment in 2010 when compared to the previous year, and none thought sales would be worse than last year.

"Despite the last minute hurdle thrown at shoppers by the weather, it's been a healthier retail Christmas than last year," said BRC’s director general Stephen Robertson.

"Whether sales growth this year makes up all the ground lost last December is the key question but certainly more customers have felt confident enough about their own circumstances to spend."

Despite the expectation that this year will break the consumer halt put in last year, Mr Robertson warned Britain's inevitable tax rises would mean people had less to spend and retailers would have to work even harder to win the battle for hard-pressed customers.

The glimmer of hope in consumer spending comes as new figures from the Australian Bureau of Statistics detail Australian wool exports in November were up 24.7pc to China and 55.7pc to India compared to 12 months prior.

But in the same period exports of Australian wool to Italy were down 63.3pc.

At the Australian retail level, Council of Textile and Fashion Industries executive director Jo Kellock said increased demand for carpets and insulation following a "marked" increase in construction would play out favourably for the wool industry.