SYDNEY (REUTERS)- Australian retail sales saw a record surge in May, official data showed on Friday (July 3), as a wide scale easing in coronavirus lockdowns allowed entire sectors to reopen, enabling a recovery from an historic plunge in April.
The strong bounce suggests consumer spending will not be nearly as weak as first feared in the June quarter, offering hope the economy can recover quickly from its first recession in three decades.
Retail sales jumped a seasonally adjusted 16.9 per cent in May, from April when it tumbled 17.7 per cent. Sales were also up over 5 per cent on May last year at A$28.97 billion (S$28 billion), according to the Australian Bureau of Statistics (ABS).
Australia eased lockdown restrictions in May as it successfully contained the spread of the virus and reopened its economy before many other advanced nations. The country has just over 8,000 coronavirus cases with 104 deaths.
Also in May, there was a massive month-on-month increase of 129.2 per cent in clothing, footwear and personal accessory retailing. Cafes, restaurants and takeaway food services saw a surge of 30.3 per cent, with both sectors coming off very low levels of trade in April.
Levels in clothing and footwear industries however remain well below the same time last year, the ABS reported.
The optimism since late April has also been reflected in credit card spending by major banks.
According to the Commonwealth Bank (CBA), card spending in the week to June 26 was up 4.5 per cent on a year ago after a 7.1 per cent lift for the week ended June 19.
Separate data from the Federal Chamber of Automotive Industries showed the slowest decline in new vehicle sales since the beginning of the Covid-19 crisis. New vehicle sales fell 6.4 per cent compared with June 2019, following double digit year-on-year declines in March, April and May.
Economists are keeping a close eye on the Reserve Bank of Australia’s (RBA) monthly policy meeting on Tuesday for any upgrades in forecasts ahead of its quarterly outlook due in August.
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