Well, guess what, retailing isn’t dead, despite what many half yearly reports from some of the industry’s leaders might have implied.
Nor is manufacturing on the fade with the first sign of expansion in the sector last month for seven months.
And the current account remains strong.
In fact the economy seems to be better than many commentators think. perhaps better than today’s 4th quarter growth figures might suggest.
Australian Bureau of Statistics figures for January showed a surprise 0.4% rise in the seasonally adjusted rate of spending in the nation’s shops.
Coming after the 0.2% increase in January and November’s 0.3%, retail sales are now running at an annual rate of 3.6%, which is a bit better than most analysts would have thought a year ago.
But ahead retailers will have to grapple with the impact of the rise in oil and petrol prices and the flood levy, when and if it is passed, plus the continuing pressure from the strong Australian dollar which is hurting retailers in consumer electronics, clothing and footwear, but boosting the sales of imported motor vehicles of all types.
So the sector isn’t heading into calmer waters just yet.
Led by a sharp 2.5% jump in food sales in January, plus a 2.3% surge in department store sales (and Myer and David Jones both showed negative sales growth in the three months to the end of January), the sector seems to be emerging from the ‘consumer caution’ slump late in 2010.
But strip out the impact of food retailing and the non-food bit was very weak, again, despite the improvement in the month
It’s not uniformly strong, book shops, consumer electricals and many consumer products outlets, clothing and footwear stores seem to be still doing it tough.
In fact household products like electricals, carpets, furniture and hardware and textiles remain weak, perhaps explaining the angst being felt at Harvey Norman (and not just on the TV and laptops side of the business).
Retail trade rose in the month to a seasonally adjusted $20.441 billion, compared to an upwardly revised $20.365 billion in December, the Australian Bureau of Statistics (ABS) said yesterday.
That was also a bit better than the 0.3% forecast from the market.
Besides the improvement in food retailing and department stores, the ABS said the ‘other retailing’ category saw a solid 2.1% jump in sales in the month.
The ABS said that sales fell in household goods retailing (-4.6%), clothing, footwear and personal accessory retailing (-2.5%) and cafes, restaurants and takeaway food services (-0.3%).
Turnover rose in Western Australia (2.7%), South Australia (2.4%), Queensland (0.3%), the Northern Territory (4.7%), the Australian Capital Territory (2.2%) and New South Wales (0.1%). Turnover fell in Victoria (-1.0%) and Tasmania (-1.0%).
FOOD RETAILING
The ABS said that by industry subgroup, the seasonally adjusted estimate rose for Supermarket and grocery stores (2.6%) and Other specialised food retailing (7.4%) and fell for Liquor retailing (-2.7%).
HOUSEHOLD GOODS RETAILING
The 4.6% fall was driven by Electrical and electronic goods retailing (-7.7%), Furniture, floor coverings, houseware and textile goods retailing (-3.2%) and Hardware, building and garden supplies retailing (-1.4%).
CLOTHING, FOOTWEAR AND PERSONAL ACCESSORY RETAILING
In this area the 2.5% fall was driven by Clothing retailing (-4.0%) and rose for Footwear and other personal accessory retailing (0.2%).
OTHER RETAILING
The seasonally adjusted estimate 2.1% increase came from increases in. By Other retailing n.e.c. (6.8%) and Pharmaceutical, cosmetic and toiletry goods retailing (3.3%) and fell for Other recreational goods retailing (-8.5%) and Newspaper and book retailing (-1.3%).
CAFES, RESTAURANTS AND TAKEAWAY FOOD SERVICES
Finally, the 0.3% fall in this category (which was the mainstay in retail sales growth for much of 2010) saw falls for Cafes,Takeaway food services (-0.4%) and Cafes, restaurants and catering services (-0.2%).
And of course car sales remain very strong (as we will find out later this week), with a near record year in 2010 and industry forecasts for a repeat in 23011.
Meanwhile the latest Australian Industry Group/PriceWaterhouseCoopers Australian Performance of Manufacturing Index (PMI) rose 4.4 points in February to 51.1.
That’s the first move into positive territory for the sector since last August and came in a month directly after the impact of the terrible floods in Queensland and Victoria, as well as Cyclone Yasi.
A reading 50 is the level separating expansion from contraction in these surveys.
"The welcome lift in the manufacturing index was largely off the back of a substantial improvement in the new order sub-index and those sub-indexes related to restocking," Ai Group Chief Executive, Heather Ridout, said in a statement.
"This suggests a more encouraging immediate outlook for the sector.
The new orders sub-index rose 7.2 points to 52.3, marking the first increase in new orders after five months of decline and inventories increased in February, with the seasonally adjusted sub-index up 13.2 points to 52.1.
Seven out of the 12 manufacturing sub-sectors recorded declines in activity in February, up from three sub-sectors in December.
And Australia reported a seasonally
