Australian retail sales continue to impress.
According to the Australian Bureau of Statistics (ABS), sales rose by 0.3% in seasonally adjusted terms, topping expectations for a gain of 0.2%.
At $26.15 billion, the value of nominal sales was the highest on record, rising by a massive $490 million from three months earlier.
The solid result saw the year-on-year pace of sales accelerate to 3.8%, the fastest since April 2016.
“We saw rises in household goods retailing (0.9%), cafes, restaurants and takeaway food services (0.5%), clothing, footwear and personal accessory retailing (0.8%) and other retailing (0.2%),” said Ben James, director of quarterly economy wide surveys at the ABS.
“There was a fall in department stores (0.3%), while food retailing was relatively unchanged.”
Over the year, sales of household goods rose by 5.9%, making it the fastest growing category of all groups surveyed. Spending on cafes, restaurants and takeaway food services also impressed, rising 5.6% over the same period.
Elsewhere food and other retailing increased by 3.8% and 2.9% respectively, while spending on clothing, footwear and personal accessories grew by a smaller 1.7%.
Sales at department stores slumped 1.1% from a year earlier, and that’s even before the arrival of Amazon in Australia.
Across the country in June, sales rose in the Northern Territory (1.2%), Queensland (0.7%), Tasmania (0.6%), New South Wales (0.5%), South Australia (0.3%) and Western Australia (0.1%), offsetting declines of 0.3% and 0.1% respectively in Victoria and the ACT.
From a year earlier, sales increased in all states and territories, led by the ACT and Tasmania at 5.3% and 5.1% respectively.
Hinting again that economic conditions across the country are strengthening, sales in New South Wales, Victoria and South Australia all rose by more than 4.5%.
The laggards remained Australia’s mining states and territories with sales growth in the Northern Territory, Queensland and Western Australia coming in below the national average at 3.5%, 2.7% and 0.9% respectively.
Still, a broad and pretty impressive performance across the country nonetheless.
And the good news didn’t stop there.
Quarterly retail sales volumes — an input into household consumption in Australia’s GDP — jumped by 1.5%, again beating forecasts for an increase of 1.2%.
It was the fastest quarterly increase since the first quarter of 2013.
Australia’s Q2 GDP report is suddenly looking good, with retail volumes likely to add around 0.3 percentage points to growth.
“The data sets up a solid base for Q2 GDP to be released on September,” said Jo Masters, senior economist at ANZ.
The ABS said that the largest contributor to the increase came from household goods retailing which jumped 2.5% over the quarter.
However, while volumes growth was strong, price pressures remained entrenched across the sector.
“On a nominal basis, retail trade was up 1.4% in Q2. This implies that prices pressures were very weak in the quarter,” said Kristina Clifton, economist at the Commonwealth Bank.
“The annual rate of retail trade inflation is just 1.0%. Department stores (1.6%), household goods (1.6%) and clothing (1.4%) have experienced price falls over the past year.”
Despite the impressive June quarter performance, markets are largely unmoved on the report with traders seemingly focused on the Reserve Bank of Australia’s (RBA) latest economic forecasts released in its quarterly statement on monetary policy.