Consumer spending in Western Australia continues to strengthen amid improved national retail figures and housing approvals after last year’s interest rate rises.
Consumer spending in Western Australia continues to strengthen amid improved national retail figures and housing approvals after last year’s interest rate rises.
Data released by the Australian Bureau of Statistics this week shows national retail trade rose by a seasonally adjusted 0.9 per cent in February.
WA led the charge on retail spending, with an increase in the trend estimate of 1 per cent, the highest in the nation, although all states reported an increased in the trend estimate.
The state’s seasonally adjusted total retail turnover was up $16 million, or 0.8 per cent, since January. On a seasonally-adjusted basis, food retailing was up by $11.9 million, or 1.4 per cent, for the month.
Clothing and soft good retailing also increased by $7.6 million, or 6.5 per cent.
Retail of hospital and service industries declined slightly, while household and recreational goods sectors were also down, by $300,000 and $5.1 million, respectively.
Nationally, the seasonally adjus-ted turnover estimate for retail and hospitality/services series increased by 0.9 per cent in February, up from 0.8 per cent in January and 0.3 per cent in December.
Retail Traders Association director Brian Reynolds said the WA retail sector was likely to continue to perform strongly, with no prospect of softening at this time.
“How that feeds through to the overall performance of the Australian retail sector is a matter that will be taken into account by the RBA when it next meets,” he said.
Meanwhile, housing approvals rose during February, putting further pressure on the Reserve Bank to increase the official cash rate.
Since February 2006, the trend for total approvals has risen 2 per cent, with private sector houses down by 3.2 per cent, and private sector other dwellings up by 10.7 per cent.
National dwelling construction approvals jumped 10.6 per cent in February, on a seasonally adjusted basis, representing the biggest monthly rise for over three years.
Only WA and Tasmania experienced a seasonally adjusted decline in approvals of dwelling units, with approvals falling in WA by 10.4 per cent.
REIWA director of policy and research, Stuart Darby, said the decline in WA approvals was influenced by a decrease in multi-residential development approvals.
"When you look at the private sector housing component, which is about 85 per cent, there’s actually a slight rise. The reduction in the WA figure is almost entirely related to multi-residential development, which is very volatile," he said.
"On the back of strong new home sales that the HIA reported for February, you’d have to say you’d even see a surge in approvals for the private sector housing component by April."
The value of approvals for new residential buildings fell for the third consecutive month, from $441 million to nearly $420 million, while the total value of approvals for all building types increased by $49 million.
In other states, dwelling approvals were up by as much as 34.8 per cent (South Australia) and 29 per cent (Victoria).
Housing approvals in the private sector were marginally up in WA, while total building approvals in the private sector were down.
Overall, approvals for houses fell 0.3 per cent, while private sector ‘other’ category rose by 31.5 per cent.
ICAP chief economist Michael Thomas said the national building approval figures suggested the owner-occupier sector was still struggling.
“Dwelling approvals reveal underlying weakness persists, with owner-occupiers still priced out of the market and lumpy, multi-unit blocks of flats causing volatility month-to-month,” he said.
However, Citigroup senior economist Annette Beacher said the overall building approvals rise was stronger than the market had anticipated.
“When you look at overall approvals, the trend has stopped falling and has now started to turn back up again,” she said.
