Economists Tip “Very Weak” April Retail Sales
NAB economists are forecasting a significant drop in local retail sales for April – a 0.5% decline versus ABS numbers in March.
The bank is also predicting March retail growth figures of zero, down from the ABS’ estimate of 0.3%.
Should the bank’s forecasts be correct, the results reflect the weakest monthly reading in nearly two years.
“Unfortunately, our data mapping brings a very weak forecast for retail trade for April,” asserts Alan Oster, NAB Chief Economist.
“We forecast that ABS retail trade will fall 0.5% a month on month basis, the weakest forecast in our series going back some half a decade.”
The NAB Index harnesses personal transaction information from its platforms to asses electronic spending – often a reliable reflection of national spending levels.
“This is clearly a very weak result, which further underlines our broader concerns about the Australian economy,” adds Oster.
Like many analysts, NAB expects the Reserve Bank to slash Australia’s cash rate by 50 basis points to 1% by year end.
The Australian Bureau of Statistics (ABS) is forecast to release official retail sales numbers on June 4, the same day as the Reserve Bank’s monetary policy meeting.
The bank claims other data also reflects weaknesses, notably the April NAB Monthly Business Survey, reflecting a short bounce in March, as expected.
“While trading and profitability have previously dipped below average, April is the first time the employment index has shown signs of weakness,” claims Oster.
“While employment has previously held up better — similar to official data — the impact of slowing activity and a weak outlook may now be flowing through to the labour market.
“This does not bode well for consumer sentiment or retail sales.”
The forecasts are said to be significantly below trend growth and target inflation, with two rate cuts predicted for this year – taking the cash rate to a record low.