Retail sales in Australia recovered in Q3 2008, though slightly, corresponding to the reduction in taxes and decrease in fuel prices.
According to a report by the Australian Bureau of Statistics, retail sales in Australia witnessed a seasonally adjusted increase of 0.1% in succession during Q3 2008, after recording decline in the last two quarters, as per the news published by RTTnews.
In Q3 2008, retail sales reached A$ 53.10 Billion, high from A$52.58 Billion recorded in Q2 2008. Retail sales, at current prices, recorded a seasonally adjusted 0.8% increase in the third quarter of 2008 to reach A$55.04 Billion, after posting a 0.4% rise in Q2 2008. However, the retail sales registered in Q3 remained less than the forecasted 0.5% increase.
The major reasons triggering this slight growth in the retail sales during Q3 2008 were reduction in taxes and the declined prices of fuel that encouraged some of the Australian families to execute their expenditure plans and they might have spent a little higher than usual.
However, during Q3, the retail sales remained almost flat due to the strictly restrained behavior of the consumers towards spending. As a result, weak retail sales due to declining consumer confidence have created uncertainty among the retailers in Australia.
But sales are expected to spring back in Q4 2008, though consumer spending in 2009 seems uncertain as the starting boost offered by the policy will start fading out. Also, in the coming times, weak labor market and decrease in wealth are expected to put adverse effects on the country’s retail sales.
As the reduction in tax from the latest federal budget and the stimulus plans of the Federal Government are still awaited, consumers can hope of getting more money to spend on retail sector.
According to a Research Analyst at RNCOS, “The Australian retail market recorded slow growth in October this year as the global economic crisis kept consumer expenditure restrained. However, rate cuts by the Reserve Bank of Australia, fiscal plans of the government and lower prices of gas will certainly encourage the consumers to spend and consumer expenditure is expected to come back on the track in December 2008.”
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