Retail sector slow but ‘okay’

Australian retailers have continued their recent solid performance, with sales increasing 0.4 per cent in September.

The seasonally adjusted result was in line with expectations and follows another 0.4 per cent rebound in August after sales fell in July.

However, on an annualised basis, sales growth slipped back marginally to 3.6 per cent.

AMP Capital’s Shane Oliver said the figures showed consumer spending was continuing to make an okay, but not a strong, contribution to September quarter GDP growth.

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Spending on household goods rose 1 per cent with electrical equipment up 2.2 per cent.

Department stores continued to suffer with sales on a seasonally adjusted basis down 2 per cent.

While sales were up in most states and territories, falls were recorded in Queensland and the ACT.

Dr Oliver also noted the AIG services Purchasing Managers’ Index (PMI) survey fell back to contractionary levels below 50 points in October after running above it for a few months.

“This follows a fall-back in the manufacturing PMI for October and suggests that a pick-up in business conditions and confidence may have faded a bit in the last month,” Dr Oliver said.

Trade deficit narrows

Australia’s international trade performance beat expectations, with the deficit narrowing to $2.3 billion in September from $2.7 billion in August. However, it is the 18th consecutive month of deficits.

In seasonally adjusted terms, the value exports rose $901 million – or 3 per cent – while imports also rose, up 2 per cent or $507 million.

The notoriously volatile performance of gold exports helped the overall performance, up 10 per cent or $135 million for the month.

Iron ore and mineral exports rose 8 per cent, while coal exports continued their slide down 9 per cent. Rural exports were up 1 per cent, with cereals leading the way with a 2 per cent increase in the value of sales.

– ABC