HomeContributorsFundamental Analysis(AU) Australian Retail Sales Post Surprise Drop In February

(AU) Australian Retail Sales Post Surprise Drop In February

‘Despite sharply rising ‘wealth’, today’s data suggests Q4’s stronger consumer is flagging, both a risk to the 2017 growth outlook, but also possibly signalling little inflation pressure in the Q1 CPI print due at the end of this month.’ – UBS

Australian retail sales dropped unexpectedly in February, generating major concerns about the outlook for the economy. According to the Australian Bureau of Statistics, sales fell 0.1% on a seasonally adjusted basis, following the previous month’s gain of 0.4% and falling behind analysts’ expectations for a 0.3% increase. February’s drop marked the second monthly decline in the last three months. The ABS said sales dropped 2.5% in clothing, footwear and personal accessory retailing and 0.4% in household goods retailing. Meanwhile, food and in department store sales advanced 0.3% and 0.8%, accordingly. The retail sales report measures broad consumer spending patterns, which accounts for more than half of Australia’s economy. Despite high construction activity, sales of household goods dropped 0.4%, following a 2.5% fall in the furniture, floor coverings, houseware and textile goods subcategory. In regional terms, sales declined 07% in Western Australia, 0.3% in Victoria, 0.2% in Queensland, 0.5% in Tasmania and 0.5% in the Australian Capital Territory, offsetting gains of 0.4% in in New South Wales and the Northern Territory and a 0.1% rise in South Australia. Growth in national sales over the last year dropped to 2.7%, the lowest in almost four years.

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