Data Snapshot: Retail Sales - NSW Drags the Chain

These are the key points:

 

  • Retail sales grew by 0.3% in October, after growth of 0.2% in September. Annual growth stepped down from 3.7% in September to 3.5% in October – just slightly below the long-run average.
  • NSW retailing dragged the chain with the second consecutive monthly fall recorded. Indeed, in the two months to October, NSW retail sales contracted 1.2%, which is the biggest back-to-back monthly fall since early 2012. Excluding NSW, retail sales jumped 0.9% in October.
  • The figures for NSW retailing highlight that the downturn in the Sydney housing market is negatively impacting on consumer spending.
  • In recent years, cafes, restaurants & takeaway services have been a stand-out retailing category. But in October, retailing in this sector contracted by 1.2% in October, the biggest monthly percentage drop in over a year. Annual growth of 2.2% for this sector was also the slowest pace in five months.
  • Queensland posted the firmest growth in October of 1.4%, which is the sharpest monthly pace since March 2017. The ACT and Victoria also recorded solid increases in the month.
  • The falling household savings rate, high household debt levels and slow wage growth suggests limited scope for stronger growth in consumer spending. Moreover, the downturn in house prices imposes a negative-wealth effect on consumers. Nonetheless, firm job gains and ongoing growth in the population are providing some underlying support.

 

Please see the attached report for more information.

 



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