Total
0
Shares
Australia’s business conditions hit new high in April as retail sales for March climb
Source: Steven Saphore/Reuters
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Australian retailers reported another month of strong sales in March while a measure of business conditions hit an all-time high in April
  • According to data from the Australian Bureau of Statistics published on Monday, retail turnover climbed 1.3 per cent in March, following a 1.4 per cent rise in February
  • The improvement was largely driven by record-high sales at cafes and restaurants
  • Meanwhile, NAB said its index of business conditions jumped eight points to a new record during April
  • However, real retail sales for the March quarter fell 0.5 per cent compared to a 2.5 per cent increase in the December quarter

Australian retailers reported another month of strong sales in March while a measure of business conditions hit an all-time high in April.

According to data from the Australian Bureau of Statistics (ABS) published on Monday, retail turnover climbed 1.3 per cent in March, following a 1.4-per-cent rise in February.

The improvement was largely driven by record-high sales at cafes and restaurants, and suggests the economy is coping well with the end of a government support program for jobs.

Meanwhile, the National Australia Bank (NAB) said its index of business conditions jumped eight points to a new record during April, with prevailing strength reported across the majority of sectors and regions.

"The April survey result is simply stunning — with many variables reaching survey highs," said NAB's chief economist Alan Oster.

"The strength in capacity utilisation points to an expansion in business investment and ongoing hiring, even as we pass the rebound phase in the economy and move through the JobKeeper hurdle."

Capacity utilisation — a measure of the extent to which the productive capacity of a business is being used — jumped to 85.3 per cent in April from 82.5 per cent in March.

Despite the promising data, however, real retail sales for the March quarter fell 0.5 per cent compared to a 2.5 per cent increase in the December quarter.

That said, the data is heavily weighted towards the consumption of goods, and therefore does not reflect a spending switch from goods to services.

Marcel Thieliant, a senior economist at London-based research consultancy Capital Economics, said he expects a one per cent rise in real consumption in the March quarter — far less than a 4.3 per cent jump in the December quarter as spending patterns return to pre-pandemic levels.

More importantly, the implicit price deflator — a measure of the price of the average goods — rose by just 1.6 per cent in the March quarter compared to a year earlier.

"This will confirm the RBA's view that there is no evidence yet of a widespread pick-up in inflation across the economy," said Sarah Hunter, chief economist for BIS Oxford Economics.

The RBA has said it will not raise the cash rate from a record low of 0.1 per cent until actual inflation is sustainably within its two to three per cent target range.

More From The Market Herald
No new cases in VIC, NSW and QLD as Melbourne lockdown ends

" No new cases in VIC, NSW and QLD as Melbourne lockdown ends

Victoria, Queensland, and New South Wales have all recorded zero new cases of COVID-19 in the last 24 hours as Melbourne emerges from
Global stocks slide after hitting new highs

" S&P 500 closes at record high as US inflation fears recede

The S&P 500 closed at a record high yesterday as economic data appeared to support the US Federal Reserve’s claim that the current
Australian and Singaporean leaders consider travel bubble

" Australian and Singaporean leaders consider travel bubble

Australian Prime Minister Scott Morrison has met with Singapore’s leader to discuss opening a travel bubble between the countries.
NSW to welcome back international students in pilot plan

" NSW to welcome back international students in pilot plan

International students will soon be welcomed back as part of a NSW Government trial to help kick-start the billion-dollar business.