Aussie dollar up on fab Feb retail sales

Christian Edwards
(Australian Associated Press)

 

Australian retail spending has rebounded sharply in February, helped by stronger business at department stores and a lift in sales for household goods and clothing, footwear and personal accessories.

Seasonally adjusted retail spending rose to $26.4 billion in the month, according to the Australian Bureau of Statistics.

The jump beat market expectations of a 0.3 per cent rise and follows a weaker outcomes over the previous two months.

The Australian dollar has responded positively to the strong result.

At 1213 AEST, the Australian dollar was 77.16 US cents, up from 76.84 US cents at 1129 AEST, just before the data was released.

Australian Institute of Company Directors chief economist Stephen Walters said the result was positive news for Australian consumers with discretionary areas of retailing the strongest.

Department store sales were up 1.5 per cent in February, clothing, footwear and personal accessory sales rose 1.1 per cent, as did household goods retailing, while sales at cafes, restaurants, and takeaway food outlets, rose 0.7 per cent.

“Combined, the rise in the discretionary areas of spending was the biggest since last November, when technology sales were inflated by the release of the new iPhone, without that fleeting technology effect, today’s result is the best since last May,” Mr Walters said.

The strongest retail sales came out of NSW, Victoria, and the Northern Territory, all rising 1.1 per cent for the month, while sales were the weakest in the resources states, with Western Australia and Queensland, falling by 0.6 per cent and 0.3 per cent respectively.

Mr Walters said the spending mood may reflect some of Australia’s more than 400,000 new, mostly full-time jobs generated over the past year.

“But, wages growth is marooned close to all-time lows, interest rates have started to rise, share markets have been volatile, after an unusually calm 2017, and consumer confidence remains brittle.”

“So, the retail sector probably is not out of the woods just yet,” he said.

Newspaper and book retailing was the worst sub-sector for sales, dropping 5.7 per cent.

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