Australia’s retail sales report for January is about to be released.
Sales have been volatile in recent months, soaring in November only to slump in December, reflecting the increased influence of Black Friday/Cyber Monday sales along with the later release of the new iPhone model.
However, with those events now drifting into the distance, the January report is likely to reflect the strength of spending in the early parts of 2018.
The lead indicators present a mixed picture on what’s likely to be seen with some pointing to accelerated growth while others suggest activity levels for retailers remain dire.
We’re about to find out reading — if either — is right.
Here’s the state of play.
- In December, sales fell by 0.5% to $26.261 billion, partially reversing a 1.3% increase in November.
- It was the largest monthly percentage decline since August.
- Sales fell in all categories aside from food, led by declines of 2.6% and 1.8% respectively for household goods and at “other” retailers.
- These categories were boosted in November by later-than-usual release of the latest iPhone model, along with a greater influence of Black Friday and Cyber Monday sales in Australia.
- Sales also fell across department stores (0.6%), in cafes, restaurants and takeaway food outlets (0.1%) and for clothing, footwear and personal accessories (0.1%).
- Sales of food — the largest component by dollar spend — rose by 0.7%, helping to partially offset weakness in other categories.
- By state, sales fell in all locations except for Queensland, led by 1.6% and 1.5% declines respectively in Tasmania and the Northern Territory.
- Sales in New South Wales and Victoria — Australia’s most populous states — fell by 0.8% and 0.4% over the same period.
- With sales going backwards during the month, the annual increase slowed to 2.5% from 2.9% in November.
- Today, economists expect a modest rebound in sales.
- The median economist forecast looks for an increase of 0.4%. Individual forecasts offered to Bloomberg range from gain of anywhere between 0.1% to 0.6%. No forecasters are looking for a back-to-back decline in sales.
- The National Australia Bank’s Cashless Retail Sales Index — an indicator that has a fairly good track record for predicting movements in the ABS’ official measure — suggests sales may have grown by 0.4% over the month.
- Separate data from the Commonwealth Bank revealed nominal spending at retail stores surged by 1.7% in January in trend terms, the largest increase in over eight years.
- However, underlining the need for caution, separate research from the Australian Industry Group showed activity levels across Australia’s retail sector deteriorated at the fastest pace since June 2012 in February.
- In the minutes of the Reserve Bank of Australia’s (RBA) February monetary policy meeting, the bank said recent “information from [its] liaison program had pointed to moderate growth in retail sales [in January]”.
The January retail sales report will be released at 11.30am AEDT.
Business Insider will have all of the details once it hits the screens.
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