November’s Black Friday sales fuelled a better-than-expected retail turnover for the month, but economists are wary of how much of the 0.9 per cent increase would previously have been spent in December.
Consumers spent a seasonally adjusted $27.91 billion in November, according to Australian Bureau of Statistics data released on Friday, with consumers dropping the most at department stores, and on clothing, footwear and personal accessory retailing.
The result snapped a streak of four consecutive months of retail trade undershooting consensus expectations, with November just the fourth month in 12 that beat economists’ predictions.
Ben James, ABS director of quarterly economy wide surveys, said the data indicated the worldwide online sales event Black Friday had delivered its best performance yet since rising to prominence in Australia a few years ago.
“While seasonal adjustment removes regular seasonal patterns associated with Black Friday based on prior results, the strong seasonally adjusted rises in a number of sub-groups this month shows that the impact of this Black Friday exceeded that of previous years,” Mr James said.
However, BIS Oxford chief economist Dr Sarah Hunter said it remained to be seen how much of the month’s retail gains were brought forward from a traditionally strong pre-Christmas period..
“Consumer confidence surveys suggest that households are becoming increasingly concerned about the economic outlook and some retailers have reported that December was disappointing, suggesting that total spending in the run up to Christmas was fairly subdued,” Dr Hunter said.
NAB’s Kaixin Owyong also expressed concerns about the trend in consumer spending, given flat October sales and the quarterly contraction in retail volumes, despite $7 billion of personal income tax cuts and three interest rate reductions since June.
Retail is one of several indicators that suffered in Australia during 2019 amid weak consumption and subdued growth.
Ernst & Young chief economist Jo Masters said households appeared low on confidence in the face of low wages growth and elevated job insecurity, meaning it was likely too early to call the November result a “retail resurgence”.
“It’s quite possible that households have simply changed the timing of their purchases rather than increased overall spending,” Ms Masters said.
Consensus predictions were for a 0.4 per cent increase in spending for the month, following an upwardly revised 0.1 per cent increase in October.
Online retail turnover contributed 7.1 per cent to total retail turnover in original terms in November 2019.
In November 2018, the figure was 6.6 per cent.
The strongest state-based retail turnover increases for November were in South Australia (by 1.4 per cent), Queensland (up 1.2 per cent) and Victoria (up 1.1 per cent).
New South Wales’ retail trade increased by 0.7 per cent.
Only the Northern Territory declined in activity, by 0.2 per cent.
The Australian dollar climbed from 68.55 US cents to 68.68 US cents in the five minutes after the release of the data, and by 1230 AEDT had eased to 68.63 US cents.
AAP