Retail spending has risen for the third month in a row, giving hope to a sector struggling with a high Australian dollar and consumer caution.
Retail spending rose 0.4 per cent in September, as expected by economists, the Australian Bureau of Statistics (ABS) reported on Thursday.
This will come as good news to local retailers who have been recording disappointing sales results due mainly to cautious spending by consumers and a high Australian dollar.
CommSec economist Savanth Sebastian said the data provided “glimmers of sunshine” for the retail sector.
Mr Sebastian said sales had increased for the third consecutive month for a total gain of 1.8 per cent.
“Now, that may not sound like much, but when you consider that it is the best three months of growth since November 2009, it becomes a big deal.”
The bureau also reported that retail spending was up 0.6 per cent in the September quarter, in seasonally adjusted volume terms.
Economists’ forecasts had centred on a 0.4 per cent rise in retail sales in the month of September and a 0.6 per cent rise in the quarter.
ICAP senior economist Adam Carr said the data suggested retail spending rebounded over the last few months.
“We’re now looking at sales, excluding food, running at a fairly rapid pace,” Mr Carr said.
“It’s another reason why the Reserve Bank of Australia (RBA) didn’t need to cut (interest rates).”
The RBA decided to cut the official cash rate by 25 basis points to 4.5 per cent on Tuesday.
In a statement accompanying the decision, the central bank said subdued demand and a high exchange rate had contained inflation recently.
Mr Carr said retail sales data had been understating spending for some time, mainly due to a recent shift in consumer spending from goods to services.
“Real spending is actually a lot stronger and that’s been shown in the national accounts.
“So, for this series to show a pick-up in sales suggests that the pick-up elsewhere has probably been even stronger.”
Citigroup director Paul Brennan said the ABS figures showed an optimism amongst consumers, despite economic uncertainties in Europe.
“Obviously, we’ve got a new test with what’s happening in Greece but these figures give us some level of confidence that the consumer’s well-supported by income growth,” he said.
Mr Brennan said Tuesday’s interest rate cut would provide another buffer against further concerns around global markets.
But ANZ senior economist Julie Toth said Thursday’s data showed that consumer spending was picking up only very slowly and very selectively.
“Looking forward, we expect retail spending growth to remain subdued in December,” she said.
That was because of the subdued global economy, consumers seeing risks to household wealth and a weak local employment outlook, Ms Toth said.
Moving into 2012, Ms Toth expects to see a very mild acceleration in household spending, as the local and global economic environment improve and consumers begin to feel more relaxed again about their discretionary spending.
