Low interest rates, and possibly an influx of Poms, are still pushing through the economy with the release of ABS retail sales data for November showing a broad rise in retail trade across all states.
CURRENT PRICES
- The trend estimate rose 0.5% in November 2013. This follows a rise of 0.5% in October 2013 and a rise of 0.5% in September 2013.
- The seasonally adjusted estimate rose 0.7% in November 2013. This follows a rise of 0.5% in October 2013 and a rise of 0.9% in September 2013.
- In trend terms, Australian turnover rose 4.1% in November 2013 compared with November 2012.
- The following industries rose in trend terms in November 2013: Cafes, restaurants and takeaway food services (1.1%), Other retailing (0.9%), Food retailing (0.3%), Clothing, footwear and personal accessory retailing (1.2%), Department stores (0.5%) and Household goods retailing (0.1%).
- The following states and territories rose in trend terms in November 2013: New South Wales (0.6%), Victoria (0.7%), Queensland (0.4%), Western Australia (0.4%), South Australia (0.3%), Tasmania (0.8%), the Australian Capital Territory (0.5%) and the Northern Territory (0.6%).
Westpac’s take on the data
Australian retail sales improved in November, rising 0.7% in the month, following the 0.5% outcome seen in October. That lifts the year-ended pace to 4.5% from October’s 3.6%. Trend growth lifted to 0.5%mth from the 0.4% previously reported a month ago, close to a 7% annualised pace, which is about twice the rolling five year average.
While food retailing contracted slightly, and the structural decline in department stores continued, the majority of the discretionary components of this series performed quite well. Clothing and soft goods, accommodation, restaurants and take-away food and ‘other retailing’ all had good months, while sales of household goods were respectable, albeit off a low base. Looking at the split by store type over three months, the strength of accommodation, cafes and restaurants stands out, with a cumulative 4.8 percentage points of growth, culminating in a very strong 2.2% in November. Anecdotally, the travelling English fans in Australia for the Ashes series may have had a modest influence on this pattern. If this is the case, this item should prove to be resilient to retracement next month.
By state, WA, SA and Victoria had the best time of it in the month, expanding by 1.3%, 0.9% and 0.9% respectively. NSW held the annual result back with modest 0.4% growth, with Qld a tick higher at 0.5%. These outcomes were sufficient to see a material acceleration in year-ended growth across the board. Annualised trend growth by state (rounded to the nearest whole figure) is now 8% in NSW, 9% in Victoria, 5% in Qld and 4% in WA.
We had observed that the bounce in retail sales since August has been heartening but just a shade disappointing given the atmospherics around improvements in consumer sentiment, rising house prices and low interest rates. We had previously put this down to well-founded concerns among households regarding their job security. This result goes some of the way towards relieving the somewhat hollow feeling generated by the OK but unspectacular cluster of retail results seen from August to October. However, we note that sentiment softened in December itself, with job concerns heightened. That may presage a weaker outcome in some of the discretionary categories when the December data comes to hand.