Australian Retail Sales Up

Australian retail sales rose for a second month in July as consumers rediscovered department stores while dining out more, a promising start for both consumption and economic growth in the third quarter.  Thursday’s figures from the Australian Bureau of Statistics showed retail sales rose 0.4 percent in July to a record A$23.3 billion ($21.8 billion). That built on a 0.6 percent increase in June and marked the best two months so far this year.

That was a welcome step-up from the previous few months when consumer caution over an unpopular government budget combined with mild autumn weather to knock sales flat.  The improvement is important as the A$270 billion retail sector accounts for 17 percent of Australia’s A$1.6 trillion in annual gross domestic product (GDP) and is the second-biggest employer, providing 10 percent of all jobs.

It suggests household spending started the current quarter on firmer footing and augured well for faster economic growth. Data out on Wednesday showed the economy expanded by a moderate 0.5 percent in the second quarter, though growth for the year was still a solid 3.1 percent.  “A better start to Q3 is appearing from the likes of business and consumer confidence, hints of better consumer spending and a solid pipeline of dwelling investment activity ahead,” said David de Garis, a senior economist at National Australia Bank.

Reuters

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