Australia’s retail sales report for December will be released later on this morning, with economists forecasting another subdued outcome after a weak result in November.
However, while in nominal terms retail spending is expected to remain soft, economists expect a strong rebound in sales volumes during the December quarter, something that will bode well for households consumption in Australia’s upcoming Q4 GDP report.
Here’s the state of play:
- In November, nominal sales rose by 0.2% to $25.665 billion, according to the ABS, just half the rate that had been expected by economists.
- As a result, the annual pace of sales slowed to 3.3%, down from the 3.5% level reported in October. It left annual retail sales growth at the lowest level since August 2016.
- Over the year, sales of clothing, footwear and personal accessories recorded the fastest pace of growth all categories at 5.8%, edging out sales at cafes, restaurants and takeaway food services which increased by 5%.
- Food retailing — the largest component of retail sales by dollar spend — increased by 3.1% to $10.312 billion.
- Department store sales were the only category to record a drop over the year, sliding 3.2%.
- By state and territory, the ACT, at 6.4%, recorded the fastest annual growth in sales, outpacing gains of 4.3%, 3.7% and 3.5% in New South Wales, Queensland and Victoria.
- At the other end of the spectrum, sales in Western Australia fell by 0.5% over the year. Other states and territories highly exposed to the mining industry also underperformed with sales in the Northern Territory and South Australia increasing by just 0.3% and 2.8%.
- For December, economists expect nominal retail sales growth to rebound fractionally. The median forecast calculated by Bloomberg is centred around an increase of 0.3%, with individual forecasts ranging from a decline of 0.4% to a gain of 0.8%.
- The ABS will also release quarterly retail sales volumes alongside the December report, with a solid rebound expected by economists.
- After contracting 0.1% in the September quarter, contributing to Australia’s shock 0.5% GDP contraction in Q3, volumes are tipped to increase by a strong 0.9% in the December quarter.
- Given its importance to GDP, this figure may prove to be as influential, or perhaps even more so, than the monthly sales result.
Both figures will be released at 11.30am AEDT.
Business Insider will have full coverage as soon as they hit the screens.