15 Oct 2010

Retail Sales Account

Retail sales account for around 23 percent of Australia’s GDP and the sector is the biggest employer with about 15 percent of all jobs.

Estimates for September had ranged from a 0.5 percent drop in sales to a 0.8 percent rise, with a median of a 0.4 percent increase.

Sales volumes for the whole third quarter were seen dropping 0.4 percent, with estimates ranging from a 0.9 percent fall to a 0.5 percent increase. That would point to a modest drag on GDP growth in the quarter.

Sales have been generally supported this year by government stimulus packages, but most of that has now faded, leading to uncertainty on whether consumer demand would hold up.

Policy makers are hopeful that rising wages, high consumer confidence, and relatively low unemployment will support demand going forward.

Building approvals have recovered sharply in recent months thanks to a potent cocktail of low mortgage rates and governmment grants to buyers of new homes, and another rise was expected for September.

Housing construction looks set to add to GDP growth in the second half of the year, having dragged on the economy in the previous three quarters.

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