Supermarket and grocery spending, which was worth $908 million for the month, was down 1.7 per cent.

Retail record belies modest growth

Retail spending in Western Australia has hit its highest level on record, in seasonally adjusted terms, with September expenditure more than $2.8 billion; yet growth is well down from the heights of the boom.

That figure represents an increase of 0.5 per cent on August, again in seasonally adjusted terms, and a gain of 2.5 per cent on September last year.

The month-on-month performance was better than the national average of 0.35 per cent, although compared with September 2014, retail spending growth Australia-wide was 3.7 per cent higher.

Breaking down the data, the best WA performers were hardware and building supplies, with growth of 8.3 per cent, clothing retailing, up 6.8 per cent, and liquor retailing, which was up 4.1 per cent.

Supermarket and grocery spending, which was worth $908 million for the month, was down 1.7 per cent.

AMP Capital chief economist Shane Oliver said the national figures were in line with market expectations.

“Real retail sales rose 0.6 per cent in the September quarter, which is in line with the previous two quarters and points to consumer spending continuing to make an okay but not strong contribution to September quarter GDP growth,” he said

“Nominal retail sales growth is constrained compared to the pre-GFC period partly because retail price inflation remains very weak at just 0.9 per cent year on year, confirming the picture from the September quarter CPI that corporate pricing power remains very weak in the face of still constrained consumer demand.

“This is also consistent with the mixed results we are hearing from Australian retailers.”

Dr Oliver said WA growth was substantially lower than during the mining boom.

St George Bank chief economist Hans Kunnen said the retail sales data hadn’t set the world on fire.

“The monthly rise of 0.4 per cent in September was modest,” he said.

“The decline in the annual pace of sales to 3.7 per cent was disappointing and below the long-run average of 4.5 per cent.

“Retail volumes, which take out the effect of prices, rose by a smaller than expected 0.6 per cent in the September quarter.

“This is a slight easing in growth from 0.7 per cent in the June quarter.

“It suggests that overall household consumption continued to grow at a moderate pace in the September quarter.”

Furthermore, AIG’s indicator of conditions in the services sector, the Performance Manufacturing Index, came in at 48.9, down from above 50 in recent months.

Dr Oliver said that data suggested a pick-up in conditions and confidence may have faded in the past month.

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