Retail sales remained stubbornly sluggish in September, with particular weakness in the trade services and homeware markets, according to new ANZ figures.
The bank’s small business sales trends report shows that SME sales edged up by 0.4% year-on-year in September, with a healthier rise of 2.5% in the three months to September, compared to the same quarter last year.
Struggles in the building industry have been blamed for the poor sales of homeware items such as appliances, electrical goods and furniture, as well as trade services such as construction and plumbing.
Conversely, sales of food and travel-related items continue to do well. Geographically, sales in Western Australia, Northern Territory and Queensland are outperforming the rest of the nation down, in part, to the mining boom.
Nick Reade, general manager of small business at ANZ, says: “Overall the growth in small business sales has remained relatively soft this month and trading conditions across different sectors have remained varied.”
“Figures in previous months had suggested a possible resurrection in retail-related small business sales. However, the weakness appears to have returned, with sales up only 1.3% over the year to the last three months.”
“The changing consumer spending patterns and the persistently high Australian dollar continues to encourage spending online and overseas, which is having a negative impact on our traditional retailers.”
Justin Fabo, head of Australian economics at ANZ, adds: “Across the states, small business sales in Western Australia and the Northern Territory, which are benefiting from mining-related activity, continued to significantly outperform.”
“However, given some recent cancellations and delays of a number of mining projects, recent falls in the prices of some key commodities and signs of softer labour conditions in the mining sector, we will be watching activity in the mining states closely.”
“Due to the current challenges facing the Australian economy, including the recent weakness in commodity prices, we expect the Reserve Bank of Australia to lower the official cash rate further, which may assist with stimulating growth in future sales.”
