Australian retail sales surge in October as the economy revives COVID 19 lockdown regulations are eased in Sydney.
SYDNEY Reuters - Australian retail sales rebounded with a ban in October as the lifting of many stay-at- home restrictions unleashed a wave of pent-up shopping, further evidence that the economy is recovering rapidly from a pandemic-induced slump.
Retail sales rose by 4.9% in October to A $31.1 billion $22.31bn, extending September's already strong 1.7% bounce, according to data from the Australian Bureau of Statistics.
There was an increase of almost double market forecasts of a 2.5% rise, with clothing stores boasting gains of almost 28%, department stores 22% and restaurants 12%.
The cash splash means that the A $360 billion retail sector will make a major contribution to economic growth.
Marcel Thieliant, a senior economist at Capital Economics, said consumer spending could bounce back by 10% this quarter, leaving it very close to its pre-Delta peak.
Consumption will expand at a rapid pace next year, with the household savings rate still very high. National vaccination rates of 86% allowed Sydney and Melbourne to reopen with almost no restrictions.
Spending on bank cards this month is about 10 percentage points above pre-pandemic levels, and online retailers are flagging a bumper Black Friday as the Christmas shopping season gets into full swing.
Matthew Hassan, a senior economist at Westpac, said that this year is set to be stronger because of the reopening of rebounds in full swing and the risks of shortages and delivery delays.
It is a welcome boost to the economy, given household consumption accounts for around 55% of gross domestic product and was the main cause of lock-downs in the third quarter.
Australia's strong export performance will offset some of the pain, as the official GDP report is due next week and could show a fall of around 3% in the third quarter.
Analysts at CBA estimate that the economy shrank by 3.5% in the quarter, making it the second-largest fall on record, while Westpac upgraded its forecast to a contraction of 2.5% from a previous prediction of a 4.0% dive.
Gareth Aird, CBA's head of Australian economics, said that the GDP report will be another release for the history books as half of the country is in lockdown.
The landscape has changed markedly as vaccine rates are exceptionally high, lockdowns are over and the economy is starting to fire on all cylinders.