Retail sales have increased by a seasonally adjusted 1% during May, with low interest rates and the Government’s economic stimulus payments helping sales rise.
The figures, from the Australian Bureau of Statistics, also show that large retailers and retail chains saw sales rise by 2.5%, while smaller retailers saw an increase of 2.3%.
The increase follows a 0.3% jump in sales during April. All industries except household goods retailing saw increases, with department store sales rising by 5.5%, clothing and soft goods retailing jumping by 2.9%, and cafes, restaurants and takeaway food services recording a 1.4% increase.
ANZ Banking Group economist Riki Polygenis told Reuters that the data indicates the Reserve Bank of Australia will keep the official interest rate on hold.
“Today’s retail data is consistent with the Reserve Bank staying on hold for a number of months. They do appear comfortable with how policy settings are affecting the economy at this point of time,” Polygenis said.
“The question is whether that can continue into the second half of the year, and that will depend critically on the labour market.”
Meanwhile, new figures from Super Ratings show that superannuation funds have officially experienced their worst performances since compulsory super was introduced in 1992.
The figures show that super fund returns were down by 13% for the year ending 30 June. Jeff Bresnahan, Super Ratings managing director, said in a statement it is the first time that consecutive financial years have recorded negative returns.
“Whilst these returns will not be welcomed by superannuants, they compare favourably to the -46% return on listed property and -25% returns on the ASX and Dow Jones.”
Shares fall sharply
The Australian share market has opened lower today after negative leads from Wall Street, due to pessimistic consumer sentiment data.
The benchmark S&P/ASX200 index was down 75.2 points or 1.9% to 3879.7 at 12.25pm AEST. The Australian dollar has also slipped back to US80 cents.
Westpac shares have fallen 2.4% to $19.76, while Commonwealth Bank shares have also fallen 2.1% to $38.18. ANZ lost 1.2% to $16.30 as NAB lost 2.1% to $21.97.
Building approvals have fallen by 12.5% in May after three consecutive months of rises, new figures from the Australian Bureau of Statistics show.
Private sector housing approvals fell by 2%, with other dwelling approvals falling by a seasonally adjusted 43.6%. The value of total building approvals fell by a seasonally adjusted 12.3%.
Manufacturing improves
The Australian Industry Group/PriceWaterhouseCoopers Performance of Manufacturing Index jumped 0.9 points to 38.4 in June, the highest reading in eight months, but below the 50-point level separating growth from contraction.
“Clearly government stimulus, lower interest rates and strengthening confidence have benefited some sectors, including food processing and clothing and footwear,” Ai Group chief executive Heather Ridout said in a statement.
In the US, stocks have fallen after the Conference Board’s measure of consumer confidence in June showed that consumer sentiment remains low 18 months into the country’s recession. The Dow Jones industrial average lost 82.38 points, or 0.97%, to 8447.00.
Meanwhile, the president of the World Bank, Robert Zeollick, has said that financial markets are beginning to show signs of stabilizing, but the world crisis is not over.
“There seem some opportunities for improvement on the financial market side, but there is still great uncertainty about the scope and timing of recovery,” Zoellick told reporters.
“There are risks that could threaten the turnaround and I have emphasized the world needs to recognize that dangers will come in waves. A number of developing countries remain under significant stress.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
