In April, Australia’s retail spending on electronic cards were up 0.9% sa, more than consensus forecast of growth of 0.5%. Core spending, excluding motor vehicle-related and fuel spending, rose 0.4% sa. On an annual basis, growth in core and retail spending both bolstered by 7.6% and 6.8% respectively. Fuel spending was up 1.8%, helping stimulate the headline April figure. Retail spending on electronic cards rose for the second straight month in nine months and is in line with the increase in fuel prices in the month.
Meanwhile, hospitality spending grew 1.5%, underpinning core retail spending. Hospitality spending grew for the sixth straight month, rising 13.8% y/y. Bolstering housing market and robust tourism sector appear to be key supports. Strong housing market is also underpinning durable spending that grew 0.6%. Apparel spending recovered modestly. It rose 0.6% in April after declining sharply in the prior month.
Spending, on a trend basis, is rebounding. Both core retail and total retail spending were up 2.1% 3m/3m and 1.4% 3m/3m respectively. Several tailwinds, such as population growth, resurgent housing market, low interest rates and solid employment are underpinning consumer spending, said ANZ. As the interest rates are likely to fall further, consumer is expected to help drive the domestic growth, according to ANZ. But higher consumer borrowing rates imply that this will be for a brief period of time.
