Retail trade picks up with reopening of the AU economy

Highlights 

• Data by the Australian Bureau of Statistics showed that retail trade rose by 1.3% in September 2021 over the previous month.
• Varying restriction levels have resulted in differing state-wise retail sales, with Queensland sales reaching their highest in September.
• Treasurer Josh Frydenberg remains confident that Australia remains well positioned to avoid another recession like the one seen during the initial wave.

After weathering the COVID-19 storm, Australia is looking at better days ahead as data on retail trade gives promising results. Data by the Australian Bureau of Statistics showed that retail trade rose by 1.3% in September 2021 over the previous month. Much of this can be attributed to the easing of lockdown restrictions as well as to the resumption of business activity on a broad level.

The data comes closely following the announcement regarding the reopening of international travel for the public. After 20 long months of banned international flights, Australian citizens would now be able to make overseas trips. As increasing retail trade suggests booming consumer confidence, individuals could be expected to make the most of the opening of international borders.

The rise in retail trade, marks the first monthly rise since May, as sales were seen declining during the wave of escalating Delta variant cases. Here is a closer look at how retail sales performed across states.

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Varying restriction levels pulling the strings

The delta variant affected the states with varying degrees, making recovery uneven across these states. This fact was reflected in the state-wise retail sales data as the removal and extension of restrictions impacted business activity.

For Queensland, retail sales reached their highest in September with a rise of 5.2%. The state had no lockdowns in September, consequently, business resumed with customers flocking to the markets.

A rise of 2.3% was seen across New South Wales, despite the state being in lockdowns. However, the gradual easing of restrictions helped retail sales pick up pace in the state. Despite that, the retail turnover for NSW was still significantly lower than its May 2021 value, denoting the heavy impact of the second lockdown imposed after May.

On the other hand, Victoria and Australian Capital Territory had some disappointing news on the retail trade front, as sales in both the states declined in September. Victoria was home to the lowest retail trade figures ever recorded in the state since October 2020, and the Australian Capital Territory saw sales falling by 12%.

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What lies ahead

Increasing retail activity points to strengthening demand in the economy and rising consumer confidence. Treasurer Josh Frydenberg took the news as a reassurance that Australia was on the right track. He remains confident that Australia remains well positioned to avoid another recession like the one seen after the pandemic hit initially.

Treasurer Frydenberg’s increased faith was underpinned by improving labour market conditions as well. As people are going back to work, a stronger-than-expected boost has been given to the labour market. These positive developments also hint at Australia’s growth seeping into the next year.

Given that, Treasurer Frydenberg highlighted some challenges for the economy too. He said that a major factor that can help the country avoid another recession is the rise in company and personal tax receipts.

In conclusion, as the world moves slowly towards a restriction free environment, a lot can be expected out of the coming months. While challenges persist and there is still a lot of lost ground left to recover, Australia must do what it did best throughout the pandemic- persevere through with resilience!

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