Two of the economy’s key growth engines are sputtering, with retail sales flat and building approvals continuing a trend decline in February.
Bureau of Statistics data show retail sales were unchanged in February on a seasonally adjusted basis.
The demand for goods showed an increasingly familiar divergence between to two big south-eastern states, New South Wales and Victoria, and the resources-dependent areas such as Western Australia, Queensland and the Northern Territory.
While sales rose 0.4 and 0.2 per cent in Victoria and New South Wales respectively, they were down 0.4 per cent in Queensland, 0.6 per cent in Western Australia and a large 1.6 per cent in the Northern Territory.
The ACT (1 per cent) and South Australia (0.3 per cent) had strong sales growth, while Tasmania saw retail turnover fall 0.5 per cent.
The leading sectors were household goods and departments stores (up 0.4 per cent).
Clothing, footwear and personal accessories were up 0.1 per cent, while food retailing was flat.
However, those modest gains were offset by a 0.2 per cent fall for cafe and restaurant sales and a 0.1 per cent decline for ‘other’ retailing.
Westpac economist Matthew Hassan said it to is too early to gauge the strength or weakness of consumer demand purely from retail sales, however.
“It should be noted that retail is a problematic indicator for broader consumer demand – whereas the latter showed a clear pick up in momentum over the course of last year, retail sales saw continued lacklustre growth. To the extent that demand picked up, it bypassed retailers in 2015,” he wrote in a note on the data.
“Whether the soft start for retail in 2016 indicates a slowdown in demand, price effects or sector specific issues is difficult to tell at this stage.”
Building approvals rise, but trend still down
A bounce back in apartments saw dwelling approvals rise in February, but the more stable trend figures continue to show a decline from the record levels seen in 2015.
ABS seasonally adjusted data show approvals up 3.1 per cent in February, driven by a 7.6 per cent jump in apartments, offsetting a 1.2 per cent slide in detached houses.
However, the rise in the volatile apartment approvals figure does not offset previous months’ falls, and that saw the more stable trend figure for total dwelling approvals down 0.5 per cent in February.
Dwelling approvals have been in a negative trend now for 11 months, after having boomed to record highs during the first half of 2015.
The ACT was the only state or territory to record a trend rise in dwelling approvals in February, with Victoria flat.
The biggest falls were in the Northern Territory, South Australia and Western Australia.
Deutsche Bank economist Phil Odonaghoe said the pull-back in residential building approvals is clearly continuing.
“This has been led by a slowdown in multi-dwelling approvals, which in turn is consistent with the recent moderation in investor activity,” he wrote in a note.
“That said, both single-dwelling and multi-dwelling approvals remain above their long-run average.”