The Statistics Bureau published yesterday its report on retail trade. According to the report, seasonally adjusted data show retail consumption in March 2.5% up from February, or 2.1% up year-on-year. This is faster annual growth than in February, when the annual growth rate was 1.2%, but still slower than expected. (Macroeconomists interviewed by HINA expected an average growth of 2.3% on the annual level, but their predictions varied wildly from 0.5% to 3.8%.)
So the March numbers continue the positive stretch now breaking a record of 43 months in a row, as a drop in consumption on an annual level was last recorded in August 2014. A stretch that long was never recorded in the history of the Bureau.
Annual growth in March was strongest at 3.8% for retail sales of food, drinks and tobacco products, followed by 2.8% rise in sales of non-food items. In particular, grocery sales grew by 13.1%, and other non-specialised retail by 18,2%. Specialised grocery stores, textile, clothing, footwear and leather stores also showed growth on annual level. But the RBA analysts noted that the stronger growth was hampered by a drop in other kinds of retail.
Over the first three months of 2018, retail sales grew by 3.1% year-on-year, slowing down slightly from the same period in 2017, but a slight increase compared to the last quarter of 2017. But other major indicators, such as the industrial production, stagnated, or grew only slightly, such as construction. This indicates that retail sales will continue to be the main driver of general growth.
RBA analysts noted that the expectations of a successful tourist season, and slight recovery of credit activities, support hopes for growth. However, consumer confidence indices have worsened slightly in March, suggesting a possible slowdown and need for caution. The RBA expects retail sales in 2018 to grow by 3% total.