CANBERRA, AAP – Retailers could be enjoying their last hurrah of a spectacular recovery from last year’s recession ahead of government subsidies winding down at the end of the month.
As of January, retail spending was up a massive 10.6 per cent for the year after a very strong final six months of 2020.
Preliminary retail trade figures due on Friday are expected to show a further 0.6 per cent increase in February, up from 0.5 per cent growth in January.
The preliminary series was introduced to provide a more frequent update on how the COVID-19 pandemic was impacting the economy.
The final report for February is due on April 1.
Economists at Westpac expect that the retail sector is likely to see some softening in sales in coming months as the economy fully reopens and consumers shift more of their spending to areas affected by restrictions.
Many of these are services, like tourism, travel and entertainment, are outside the scope of the retail survey.
An analysis by Deloitte Access Economic this week also forecast a slowdown in retail volumes in the second half of the year, predicting an overall 0.4 per cent decline for 2021.
It believes sectors like household goods retailing, which saw a large proportion of the spending rebound, could now see the biggest decline given the one-off nature of these purchases.
There have been concerns for some time that the end of the JobKeeper wage subsidy and changes to the JobSeeker dole payment at the end of this month could impact on Australia’s labour market.
However, economists now expect the strength of the jobs recovery could limit this impact.
Figures on Thursday showed employment jumped by a further 88,700 in February, which pushed the jobless rate down to 5.8 per cent from 6.3 per cent.
The Australian Bureau of Statistics said February’s rise had lifted the number of people in employment to above 13 million, to be 4000 people higher than March 2020 when the crisis began.