GST boosts retail sales

RETAIL sales in June rose 7.7 per cent due mainly to pre-GST spending, according to data from the Australian Bureau of Statistics.

The result was double the median market forecast of a 4 per cent rise for the month.

The main drivers were a 17 per cent rise in department store sales, a 20 per cent increase in clothing and soft good retailing and a 34 per cent increase in floor coverings.

Given that furniture and floor coverings are barely affected by the GST, Westpac chief economist Nigel Stapledon said the sharp increase in these sales was linked to the strong housing activity.