AUSTRALIAN RETAIL SALES BEAT

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For the first time in four months Australian retail sales have beaten expectations, increasing 0.4% to $24.946 billion in March according to data released by the Australian Bureau of Statistics (ABS).

The figure beat the median economist forecast for a gain of 0.3%.

In dollar terms, turnover in March was the highest level on record, and left the increase from a year earlier at 3.6%.

After seasonal adjustments, sales rose in food (0.6%), clothing, footwear and personal accessory retailing (1.1%), other stores (0.4%) and household goods retailers (0.1%).

Sales in cafes, restaurants and takeaway food services was relatively unchanged while those in department stores fell 0.5%.

From a year earlier sales of household goods and clothing, footwear and apparel rose by 5.8% and 5.2% respectively, the fastest growth of any category.

Department stores, after recording the fastest annual growth of all categories in the 12 months to February, decelerated sharply, rising just 1.7%, the slowest of any category.

Food retailing — the largest component of sales by dollar spend — grew by 2.9%.

By state and territory, sales rose everywhere except for the ACT and Northern Territory.

The two most populous states, Victoria and New South Wales, recorded increases of 0.5% and 0.4% respectively. Elsewhere sales rose in Western Australia (0.7%), Queensland (0.2%), South Australia (0.2%) and Tasmania (0.6%).

Sales in the Australian Capital Territory — the standout performer in recent months — dipped 0.6% while those in the Northern Territory slipped 0.2%.

Representative of the divergent economic performance across the country, sales growth in non-mining states and territories over the past year continued to outperform those in other areas of the country.

Sales in New South Wales, Victoria and the ACT all grew by between 6.9% to 4.9%. At the other end of the spectrum, sales in Queensland, the Northern Territory and Western Australia rose by 0.9%, 1.1% and 1.2% respectively.

Although the monthly sales increase topped estimates, it was a different story for quarterly retail volumes, something that makes up around 30% of household consumption in Australian GDP.

It increased by 0.5% over the quarter, missing expectations for a larger gain of 0.7%. It’ll still add to GDP, just not as much as had been expected.

Although a mixed report card — sales remained subdued while quarterly volumes missed — there are few policy implications to come from the March sales report.

Sales are still growing at a decent clip in New South Wales, Victoria and the ACT, helping to offset weakness in other parts of the country, while household goods retailing remain strong due to continued strength in residential property markets.

They’re all very familiar trends that have been in place for the best part of two years.

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