Record rise in Aussie retail sales fuels hopes for quick recovery

Pedestrians outside Sydney's Pitt Street Mall last month. Australia's consumer spending jumped 16.9 per cent in May on the back of the easing of coronavirus lockdown measures.
Pedestrians outside Sydney's Pitt Street Mall last month. Australia's consumer spending jumped 16.9 per cent in May on the back of the easing of coronavirus lockdown measures. PHOTO: BLOOMBERG

SYDNEY • Australian retail sales saw a record surge in May, official data showed yesterday, as a wide-scale easing in coronavirus lockdowns allowed entire sectors to reopen, enabling a recovery from a historic plunge in April.

The strong bounce suggests consumer spending will not be nearly as weak as first feared in the June quarter, offering hope that the economy can recover quickly from its first recession in three decades.

Retail sales jumped a seasonally adjusted 16.9 per cent in May from April when it tumbled 17.7 per cent.

Sales were also up more than 5 per cent on May last year at A$28.97 billion (S$28 billion), according to the Australian Bureau of Statistics (ABS).

Australia eased lockdown restrictions in May as it successfully contained the spread of the virus and reopened its economy before many other advanced nations. The country has just over 8,000 coronavirus cases with 104 deaths.

Also in May, there was a massive month-on-month increase of 129.2 per cent in clothing, footwear and personal accessory retailing.

Cafes, restaurants and takeaway food services saw a surge of 30.3 per cent, with both sectors coming off very low levels of trade in April.

Levels in clothing and footwear industries, however, remain well below the same time last year, the ABS reported.

The optimism since late April has also been reflected in credit card spending by major banks.

According to the Commonwealth Bank, card spending in the week to June 26 was up 4.5 per cent on a year ago, after a 7.1 per cent lift for the week ended June 19.

Separate data from the Federal Chamber of Automotive Industries showed the slowest decline in new vehicle sales since the beginning of the Covid-19 crisis.

New vehicle sales fell 6.4 per cent compared with June last year, following double-digit year-on-year declines in March, April and May.

Economists are keeping a close eye on the Reserve Bank of Australia's monthly policy meeting next Tuesday for any upgrades in forecasts ahead of its quarterly outlook due next month.

REUTERS

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A version of this article appeared in the print edition of The Straits Times on July 04, 2020, with the headline Record rise in Aussie retail sales fuels hopes for quick recovery. Subscribe