Australia’s retail sales continued to slump in March, falling 0.1% for the second successive quarter. Concern is mounting that once again, Australia’s rate of economic growth will slip into negative territory, driven lower by a combination of factors including stalled household consumption.
As the chart below displays, retail sales have been trending down for some time – really since late 2014. They have been lower, as the chart shows, but for clarity, on a year-end basis, retail sales growth was just 2.4% over the year-ended March. It is easy to see the downwards trend and difficult, when we think about the economy, to see what might drive a turn around.
To go straight to the dashboard and take a closer look at the data, click here.
Examining selected industries, as the chart below allows, we can see the consistent declines of the last six months and in particular the contraction in sales of hardware, Building and Garden Supplies in March 2017. To underscore this, March is the first time in the series that these retail sales have contracted.
Despite some movements up and down on a month-to-month basis, sales of Furniture, Floor Coverings and Homewares are also trending down, in line with general retail sales.
To go straight to the dashboard and take a closer look at the data, click here.
Australians are genuinely indebted right now, and have been for some time. Consumption expenditure over much of the last decade has been fuelled by cheap debt, often funded through growing equity in housing. At some point, that debt has to be paid off, and with some signs of interest rate rises in the offing, there is every prospect that has flowed through to softer, weak even, retail sales.
Storm clouds are forming on the national economic horizon.
