Moderate growth in retail spend

Western Australian retail spending rose 0.2 per cent month on month in January, to $2.8 billion, slightly below the national average of 0.3 per cent.

Those numbers were seasonally adjusted.

It comes just two days after the latest national GDP figures showed a contraction in WA final demand of 2.3 per cent in the December quarter, on the back of lower business spending.

Retail sales had also fallen in December after seasonal adjustment, down 0.6 per cent, meaning the January numbers marked somewhat of a turnaround.

By sub-industry: % growth and falls in retail sales, January, WA

Nationally, sales increased 0.3 per cent and were below forecast.

St George Bank chief economist Hans Kunnen said the national figures were neither hot nor cold.

“But neither were they ‘just right’,” he said.

“Retail sales rose 0.3 per cent in January to be up 4 per cent over the year reflecting the grinding growth in Australia’s domestic demand.

“In annual terms, growth in retail sales is now strongest in the ACT (8.5 per cent) with NSW the second strongest at 5.2 per cent.

“We expect retail sales to continue expanding at a gradual pace that adds to economic growth but does not cause the RBA to lift (or reduce) its cash rate.”

CommSec chief economist Craig James said it was an improvement on a flat December result.

“At face value Aussie consumers seem to be getting their mojos back, Mr James said.

“A number of factors have contributed to the improvement in sentiment.

No doubt the improvement in job security has resulted in consumers feeling comfortable to spend additional savings.

“In addition, super low interest rates and falling petrol prices have all resulted in healthier household budgets.”