Retail sales lifted by a seasonally adjusted 0.4% in September, the third consecutive month of gains and in line with expectations.
According to the Australian Bureau of Statistics, food retailing lifted by 0.5% over the month, with cafes, restaurants and takeaway food services up 0.6%, and other retailing growing by 0.5%.
Clothing, footwear and personal accessory retailing were down 1.4%, and department stores sales fell 0.4% in trend terms.
All states and territories rose in trend terms, with the overall trend estimate rise of 0.3% over the month, up 2.4% from September 2010.
Meanwhile, activity in the Australian services sector fell in October and remains weak, a survey shows, although there are hopes this week’s rate cut will boost next month’s report.
The Australian Industry Group/Commonwealth Bank Australian Performance of Services Index (PSI) dropped 1.5 points to 48.8 points last month – below the 50 point market separating contraction from expansion.
“While there are some signs that business spending may be gradually recovering, consumers clearly remain tentative and flat conditions persist across much of the economy,” Australian Industry Group chief Heather Ridout said.
“Consumer and business confidence continues to be sapped by the sovereign debt turmoil in Euroland. In particular, consumers remain very cautious about the future,” Commonwealth Bank senior economist John Peters said.
“In 2012, we see local GDP (gross domestic product) growth picking up to near 4% due to the stellar terms of trade and the robust mining investment boom which has a long way to run yet.”
“Such an outcome is likely to drive jobs growth and push unemployment lower, a labour market outcome that should help lift consumer spirits and spending activity.” Mr Peters said.
The Australian sharemarket has opened flat this morning following a positive lead in the United States where investors are still nervous over how Greece is going to manage its crushing debt problem without crippling the Government.
The benchmark S&P/ASX200 index was down 0.5% or 22 points to 4161.9 at 12.00 AEST, while the Australian dollar remained flat at $US1.03c.
AMP shares rose 0.49% to $4.14, while Commonwealth Bank shares fell 0.95% to $47.75. Westpac shares rose 0.42% to $21.61 as ANZ lost 0.96% to $20.70.
In the United States, the Dow Jones Industrial Average rose 1.5% or 178 points to 11,836.
ANZ has said volatility in the market and cautious consumers will affect it for some time, recording a full year profit result that was slightly below expectations.
The bank announced that for the year ending September 30, it recorded a cash profit of $5.65 billion, up 12% from the previous corresponding period, although analysts had expected the bank to record a profit of $5.8 billion.
ANZ shares fell nearly 1% after the announcement was made, with chief executive Mike Smith saying volatile trading conditions have made life difficult for the bank.
“This more difficult operating environment – characterised by ongoing economic volatility, cautious consumer and business behaviour, and higher funding and capital costs for banks globally – is likely to be with us for some time,” he said.
Statutory profit rose by 19% to $5.36 billion, up from $4.5 billion last year.
“The global economic situation saw trading conditions for our markets business deteriorate significantly,” Smith said.
“This more difficult operating environment – characterised by ongoing economic volatility, cautious consumer and business behaviour, and higher funding and capital costs for banks globally – is likely to be with us for some time.”
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