Retail spending rebounds after lockdowns

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Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

 

Retail spending jumped 1.4 per cent in March, led by gains in Victoria and Western Australia after their COVID-19 lockdowns impacted sales in the previous month.

March’s rise in the Australian Bureau of Statistics preliminary retail figures for the month was stronger than the one per cent increase expected by economists and followed a 0.8 per cent fall in the previous month.

Retail turnover was 2.3 per cent higher than a year earlier.

In the month, retail spending grew by four per cent in Victoria and 5.5 per cent in WA, rebounding from their February lockdowns.

In contrast, Queensland saw a minor fall reflecting the three-day lockdown in Greater Brisbane at the end of March.

For the March quarter, retail trade is showing a 0.1 per cent fall compared to three months earlier.

Even so, the monthly increase comes at a time of particularly strong consumer confidence.

Backing that confidence was the latest Westpac-Melbourne Institute leading index, which continues to point to solid economic growth above the long-term annual trend rate of around 2.8 per cent over the next three to nine months.

Westpac chief economist Bill Evans is predicting a growth rate of 4.5 per cent in 2021 and largely driven by consumer demand, which is expected to contribute three of those percentage points.

“The reopening of the economy, cashed up households and an 11-year high in consumer sentiment all point to strong spending,” Mr Evans said.

Meanwhile, the National Skills Commission released its final report on vacancies posted on the internet for March, confirming preliminary data showing job advertisements soared 19.1 per cent to a 12-year high.

This was the 11th consecutive monthly increase in job ads and a staggering 96.4 per cent increase above the level recorded in March 2020, the first month restrictions were introduced because of the COVID-19 pandemic.

Job ads rose across all eight occupational groups monitored by the commission during the month.

Other gauges of job advertising, which are a guide to future employment outcomes, have also been upbeat and suggest there is momentum in the economy to absorb jobs losses as a result of the end of JobKeeper.

Fewer businesses are concerned about the impact the end of the wage subsidy might have than they were six months ago.

KPMG’s pre-budget survey of 100 medium-sized business found only a third of firms now expect last month’s demise of this key support measure during the pandemic will lead to a significant decline in economic activity.

That compared with two-thirds of respondents who were polled prior to last year’s October federal budget.

KPMG’s Clive Bird said it was heartening to see businesses were feeling upbeat and less fearful of JobKeeper ending.

“Many have accessed government support schemes over the past year and are now emerging with confidence,” Mr Bird said.

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