The Australian Bureau of Statistics (ABS) this morning released the retail trade data for the month of October.
In seasonally adjusted terms, retail sales were flat over the month and rose by 3.1% year-on-year. Analysts had predicted a rise of 0.4% for the month of October.
Below is a chart summarising the monthly and annual growth rates by industry on a seasonally adjusted basis:
As you can see, food retailing (+0.9%) was the only segment to record positive sales growth over the month. By contrast, household goods retailing fell sharply, down -1.6% over the month and by -1.5% over the year.
At the state and territory level, it was a mixed bag, with increases in sales in Queensland, Western Australia and the Northern Territory (all resource-rich jurisdictions) offset by falls in the other states and Territories (with the exception of New South Wales, where sales were flat). Over the year, Western Australia (+10%) continues to dominate retail sales growth, whereas sales growth in Tasmania (-5.0%) and Victoria (-0.1%) are in the doldrums:
In annual terms, retail sales growth appears to be trending down once again following the spike induced by one-off compensation payments for the introduction of the carbon tax:
Overall, this release is a fairly weak result, and shows that there has been minimal pick-up in retail spending following the -1.50% of cuts to official interest rates since November 2011. When viewed along side the weakness in the housing sector – i.e. stagnant house price growth, weak new home sales/approvals, and record low housing credit growth – as well as the decline in expected capital expenditure, there are plenty of reasons for the RBA to continue cutting interest rates, starting with tomorrow’s meeting.
Twitter: Leith van Onselen. Leith is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.
