The latest edition of the AFGC CHEP Retail Index, an indicator of Australian Bureau of Statistics Retail Trade Data, predicts an uplift in retail turnover growth over the December quarter, followed by a return to the previous trend of slowing growth in the first few months of 2017.
The index estimates that year-on-year growth during the December quarter was 3.3%, including year-on-year growth for the month of December of 3.0% – notably a like-for-like comparison of the same period and, therefore, not simply due to occurrence of Christmas.
Looking forward, the year-on-year Retail Index growth for the month of February 2017 is expected to be 2.0% and year-on-year growth for the March quarter to be just 1.9%. That represents a moderation of more than a third, following the December quarter uplift.
According to the index and ABS data, 2016 was characterised by a degree of inertia, with growth in each month a little lower than the month before, apart from the latter months of the year, where ABS retail trade results proved to be slightly higher than the AFGC’s previous predictions.
Australian Food and Grocery Council CEO Gary Dawson said: “The rise in December quarter retail sales growth is encouraging after a challenging year. However, following this temporary relief, economic trends still point to uncertainties in the national and global economy that are leading consumers to become more cautious. While the residential housing boom, low interest rates and the shift of focus from mining states have bolstered retail turnover in Sydney and Melbourne, these benefits also appear to be starting to run out of steam in early 2017, with modest employment growth, low wage growth and a recent downturn in personal debt affecting retail trade generally.”