Growth figures of domestic retail sales have been declining since 2014 and growth figures hit a low-point in September 2017. Annual growth rates then began increasing for about a year, only to stabilise at around 3.0% to 3.5% through late-2018. After April’s figures were released, concerns arose as to a possible deterioration in consumer spending. This latest report does not do much to allay such concerns.
According to the latest ABS figures, total retail sales increased by 0.1% in May on a seasonally-adjusted basis, less than the +0.2% increase expected but an improvement on April’s 0.1% contraction. On an annual basis, retail sales increased by 2.4%, down from April’s comparable figure of 2.8%.
ANZ economist Adelaide Timbrell said the Federal election and timing of Easter had a dampening effect, although general weakness in the Australian economy was probably behind the soft result. “Broad weakness in the economy and continuing housing adjustment, despite some green shoots, may have also added downward pressure. The hangover in May from the “holiday effect” in April was seen in contractions for liquor, recreation and department store sales.