Retail sales rose by an unexpectedly strong 1.1% in April, according to official figures, improving on 0.4% rises the previous two months.
The Australian Bureau of Statistics figures show sales lifted by 1.1% to a total of $20.7 billion, bettering expectations of a 0.4% fall.
Food retailing, clothing, cafes, restaurants, takeaway services and department stores underpinned the rise, but household goods retailing recorded a 0.1% decline.
Western Australia recorded the highest increase in sales at 0.8%, followed by Victoria and Queensland both at 0.5% and South Australia and New South Wales at 0.2%.
Federal Treasurer Wayne Swan says he believes the economy is rebounding, despite yesterday’s GDP figures showing the largest quarterly drop in over 20 years.
Swan told ABC Radio this morning that he did not agree with assessments that the economy is slowing down.
“I think there is a rebound in the economy… On top of that the fundamentals underlying the economy are strong.”
Wesfarmers has announced it has cut forecasts for its Curragh coal mine due to heavy rainfall.
“Production at the Curragh mine continues to be adversely affected by significant groundwater inflow into mining areas and further unseasonal rainfall,” the company said in a statement.
“In addition, a belt failure on the Curragh North Conveyor, identified on May 22, 2011, has further affected production estimates.”
Wesfarmers Resources managing director Stewart Butel reportedly told analysts last Thursday that the company is “continuing to dewater the affected areas and now expect operations to return to full production from July 2011”.
The Australian sharemarket has plummeted this morning after a weak night on Wall Street due to a downgrade of Greece’s credit rating.
The benchmark S&P/ASX200 index dropped over 1.8% or 85 points to 4621.9 at 12.00 AEST, while the Australian dollar dropped over one cent to $US1.06c.
AMP shares lost 1.55% to $5.09, while Commonwealth Bank shares lost $1.45% to $49.63. Westpac lost 2.13% to $21.48 as ANZ fell 2.14% to $21.53.
In the United States, the Dow Jones Industrial Average plummeted 279.42 points or 2.22% to 12,290.37.
Former BHP China president Clinton Dines has told Business Spectator that giants such as BHP and Rio Tinto should make the most of commodity prices while they can.
“If you’re the BHP guy, you’re in a seller’s market and you’re selling a product that the Chinese need from you,” Dines said.
“You have the whip hand to some extent, and you’re in a position where you can probably do a lot of things that a lot of other foreign companies in China, particularly those who have to invest here and run, don’t have some of the privileged position that BHP has.”
He also said the view that rising labour costs in Chian will hurt competitiveness is negated by the ability for the Chinese Government to make such changes.
“The Government has the wherewithal and the balance sheet to do a little bit of redistribution and I tend to see what’s happened with rural incomes and the subsidies in the rural areas and also what’s happening in terms of changes to basic wage levels and letting these wages move a bit as a bit redistributive and more a part of the social justice agenda,” he said.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
