MNI DATA IMPACT: Australia Retail Sales In Surprise Bounce

By Lachlan Colquhoun

     SYDNEY (MNI) - The Australian Bureau of Statistics published the February

retail trade data Wednesday. Her we note five key points of interest.

Big surprise. 

Retail sales spiked by 0.8% in January, going against expectations of another

flat performance. It was the biggest jump in sales since November 2017, and came

after an anaemic 0.1% increase in January and a 0.4% fall in December.

Department Store Discounts. 

The Department Store sector has been under intense pressure from online

channels, but deep discounting has attracted the buyers and the sector enjoyed a

3.5% spike in February. This followed a 2.2% fall in January and a 1.2% dip in

December.

Online sales stall. 

The data showed online retail sales fell by 9.1% in February. This result

confirmed the results of the closely watched Online Retail Sales Index monitored

by the National Australia Bank released earlier this week. The NAB index saw

online sales fall by 3.4% in February, the largest monthly decline on record.

Implications for RBA. 

The result plays into the more optimistic outlook articulated by the Reserve

Bank of Australia last year, when the Bank was suggesting that the next move in

official rates was likely to be up. Since then a raft of underwhelming economic

data has seen the RBA balance its outlook, with a rate cut or a rate hike both

possible depending on the progress of the economy. More similar data is likely

to persuade the Bank against a rate cut.

Household goods spending rebounds

Spending on household goods also surprised with a 1.1% rise for the month. This

came after an unchanged result in January and a 2.9% fall in December. A revival

in this sector also plays into the RBA's more positive outlook of 2018.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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