Building approvals fell again in February and retail sales recorded no growth whatsoever (on a seasonally adjusted basis) as consumer spending and housing demand softened at the start of 2016.
January produced a small rise in retail sales and a big fall in building approvals and February did more of the same, but in a different mix.
Australia retail sales in February were steady month-on-month, coming in well below expectations of 0.4% from the market and 0.3% in January. On a trend basis sales rose 0.2% in both months.
Annual growth slowed to 3.3% year on year and momentum appears to have slowed . But the AMP’s chief economist, Dr Shane Oliver says “this may be partly due to very low retail price inflation compared to the past.”
“The loss of momentum may also reflect the waning impact from last year’s interest rate cuts and slowing wealth gains from housing as house price gains slow in Sydney and Melbourne,” he wrote in a note yesterday afternoon.
Annual retail sales growth in NSW (at 4.6% year on year) and Victoria (+4.8%on the same basis) were strong and again offset weakness in WA (where retail sales fell 0.2% year on year).
But Dr Oliver pointed out that “ here has been some loss of trend monthly growth in both NSW and Victoria which are now trending at 0.2% month on month compared to around 0.4-0.5% around mid last year. "
The Bureau of Statistics said that in seasonally adjusted terms,”there were rises in household goods retailing (0.4 per cent), department stores (0.4 per cent) and clothing, footwear and personal accessory retailing (0.1 per cent). Food retailing (0.0 per cent) was relatively unchanged. There were falls in cafes, restaurants and takeaway food services (-0.2 per cent) and other retailing (-0.1 per cent).”
"In seasonally adjusted terms, there were rises in Victoria (0.4 per cent), New South Wales (0.2 per cent), the Australian Capital Territory (1.0 per cent) and South Australia (0.3 per cent). There were falls in Queensland (-0.4 per cent), Western Australia (-0.6 per cent), the Northern Territory (-1.6 per cent) and Tasmania (-0.5 per cent),” the ABS said yesterday.
The building approvals data also showed another month of weakness.
The Bureau of Statistics said building approvals fell 9% in February year-on-year from a revised 14.5% drop in January, restated from the original 15.5% slide first reported.
It was the fourth consecutive month of solid falls in approvals.
Month-on-month approvals grew 3.1%, sharply up from the 6.6 % fall in February, revised from the originally reported 7.5% slide in January
A major factor in the month to month moves was a 7.6% rise in the number of non-dwelling approvals in February (flats, units townhouses) after a 10.8% slide in January. That halved the annual fall from 26.7% in January to 13.1% in February.
Private sector housing approvals dipped 1.2% in February from January when they dipped 6.0%. The annual rate fell to minus 5.1% in February from just over 3% in January.
