Australia’s November retail sales report is about to be released.
It’s perhaps one of the most important data releases in Australia right now, especially given weakness in household consumption — the largest part of the Australian economy — during the September quarter of last year.
This report will be no exception.
Not only will it provide an indication as to whether the modest bounce in October was a one-off or the start of a new trend, but it will also provide the first indication on the strength of sales during the Christmas/Boxing Day period, a time when around 20% of total annual sales occur.
Here’s the state of play.
- Retail sales account for around 30% of household consumption. Household consumption accounts for just under 60% of Australian GDP.
- In October, sales rose by 0.5% to $26.05 billion, the largest increase since May.
- Sales increased in every category and in every state and territory.
- September’s retail sales result, originally reported as flat, was also revised higher to show a gain of 0.1%.
- The increase saw annual growth accelerate from 1.5% to 1.8%.
- Today, markets expect a similar result for November. Of the 15 economists polled by Bloomberg, the median forecast looks for an increase in sales of 0.4%. Individual forecasts range from a gain of 0.2% to 0.6%.
- Adding to confidence that sales may meet or exceed expectations, a variety of alternate consumer indicators have strengthened in recent weeks.
- The National Australia Bank’s (NAB) Cashless Retail Sales Index — a release that has a reasonable track record for predicting movements in the ABS’ official report — points to an increase in sales of 0.5%.
- The NAB’s separate Online Retail Sales Index — a measure of sales over the internet — also jumped by 4.7% in November, the largest monthly increase since December 2014.
- Recent consumer confidence readings also bode well for today’s report.
- The Westpac-MI Australian Consumer Sentiment Index hit the highest level in four years during December, building upon the improvement seen in prior months. The separate ANZ-Roy Morgan Consumer Confidence report matched that outcome earlier this week, rising to the highest level since late 2013.
- Within both reports, readings on current family finances — a reasonable lead indicator on future spending levels — both recorded solid improvements.
The ABS will release the report at 11.30am AEDT.
Business Insider will have all of the details as soon as it hits the screens.
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