Retail trade dropped a seasonally adjusted 1% month-on-month in July, which is faster than the 0.8% drop in June. Economists were looking for 0.5% growth. The total retail turnover amounted to A$19.62 billion in July compared to the A$19.82 billion turnover witnessed in the previous month. The decline in retailing was largely a result of falling sales of household goods and food in July.
Household goods retailing declined at a monthly rate of 3.6% in July, compared to the 3.4% growth in the previous month. Food retailing decreased 1.9%, and clothing, footwear & personal accessory sales fell 0.6%.
On the other hand, retailing in department stores recorded the biggest rise in July, up 2.5% on month compared to the 9.7% drop in June. Retailing in cafes, restaurants & takeaway food services retailing was up 1%, while other retailing increased 0.8% in July.
Analyzing by individual states, retail trade declined 1.4% in both Queensland and South Australia. Retailing in New South Wales fell 1.2%, while sales in Western Australia dropped 0.9%. On the other hand, retail trade in Northern Territory registered a monthly rise, up 2% in July.
The bureau also revealed that approvals for housing finance in July fell a seasonally adjusted 2% from the previous month, exceeding economists’ expectations of a 1% decline. The monthly fall in housing finance commitments was the first recorded since the 0.9% drop witnessed in September 2008. In June, approvals for housing finance were up 0.4% month-on-month.
The total housing finance commitments in July were worth A$22.46 billion in July, down 2.3% from the A$22.99 billion reported in June.
Owner occupied housing constituted A$16.88 billion of the total. Of this, the number of dwelling constructions declined 0.7% on month compared to the 2.7% growth in the last month. Purchases of new dwellings fell 0.5%, while purchases of established dwellings dropped 2.3% in July.
Moreover, refinancing of established dwellings fell 1.7%, excluding which owner occupied housing finance commitments decreased 2.2% in July.
From a lender’s perspective, the number of owner occupied dwellings financed by banks fell 2.3% in July compared to the 0.7% increase in the previous month, while those financed by non-banks rose 0.2%.
Earlier in the day, Westpac bank and the Melbourne Institute announced that consumer sentiment in Australia climbed to its highest level since July 2007, in the month of September.
The consumer confidence index was at 119.3, rising 5.2% in September compared to the 113.4 reading in the previous month. Westpac’s Chief Economist, Bill Evans, said, “This is a truly extraordinary result. The standout story is the ‘relief rally’ for consumers - relief that the economy has avoided recession and that expected job losses have not materialized.”
Over the last four months, the index grew 34.4%, which is the largest 4 month increase in the history of the index, the report said.
“The case for a rate hike as early as next month has been strengthened considerably by this further surge in confidence”, Evans noted. The Reserve Bank of Australia had left the interest rate unchanged at 3% last week.
Meanwhile, the Australian dollar pared its early Asian session’s gains against other major currencies following the release of the retail trade data. The aussie thus fell from a fresh yearly high against the U.S. dollar and multi-week high against the yen.
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