The latest AFGC CHEP Retail Index suggests a slowing in year-on-year growth in retail sales in the last quarter of the year.
After a pick-up in the growth of the AFGC CHEP Retail Index earlier this year, growth has been easing in recent months, according to the Index.
“Looking ahead to the Christmas trading period, the AFGC CHEP Retail Index indicates that a weaker Christmas trading period may be seen this year. While sales growth should be positive, the growth in retail sales is expected to be weaker this Christmas compared with the solid performance seen last year. That result would be consistent with the latest AFGC CHEP Retail Index data.”
The fifteenth edition of the Index was 4.2 per cent higher in September 2014 compared with September 2013, a moderation in the rate of growth from 4.9 per cent in June 2014.
On a quarterly basis, the Index was 4.8 per cent higher in the September quarter 2014 compared with the September quarter 2013.
Growth in the Index, however, is expected to slow further over the remainder of this year, to 3.2 per cent over the 12 months to December 2014.
“Despite some good signs for the outlook in terms of low interest rates, a number of factors continue to take their toll on retail sales. In particular, historically slow wage growth has meant that household income growth has remained below average. At the same time, consumer sentiment has been fragile and has failed to see a significant recovery since falling in the wake of the Federal Budget in May,” according to the Index.
“Australia’s economic backdrop remains muted with the slowdown in mining construction still underway and a slowdown now underway in China’s economy. Most fundamentally, the labour market will need to improve to underpin and sustain a strong rate of growth in incomes, and therefore retail spending.”
