Australian retail trade rose 0.6% cent in May, which is good news for CE and appliance retailers who were anticipating a “Soft market” according to several retailers we have spoken to.

This was up on the 0.1 per cent rise in the previous month with the calendar year tracking at 1.7%.

Analysts were tipping a 0.3% month-on-month rise for May.

According to the AFR, Robert Ewing, ABS head of business statistics, said the figures were boosted this month by shoppers taking advantage of early end-of-financial year promotions and sales events.

“Retail businesses continue to rely on discounting and sales events to stimulate discretionary spending, following restrained spending in recent months,” he said.

“Despite the seasonally adjusted rise, underlying spending remains stagnant with retail turnover flat in trend terms. Compared to May 2023, trend is only up 1.5 per cent.”

“Retail turnover was boosted this month by watchful shoppers taking advantage of early end-of-financial year promotions and sales events,” the ABS claims.

“Retail businesses continue to rely on discounting and sales events to stimulate discretionary spending, following restrained spending in recent months.

“Despite the seasonally adjusted rise, underlying spending remains stagnant with retail turnover flat in trend terms.”

May building approvals rose 5.5% versus 1.6% that was expected after a 1.9% rise in April which was revised up from a 0.3% fall first reported.

The data spark a rise in the Australian dollar and bond yields and trim intraday gains in the local share market as they potentially increase the risk of a restart of rate hikes by the RBA at its next meeting in August.

The rise is not good news on the interest rate front with the RTBA looking to curtail spending in an effort to control inflation.

Currently the cash rate is on hold at 4.35%

with some tipping a further rise if inflation cannot be controlled.

A better than expected monthly inflation report for May prompted observers to ramp up rate increase bets in Australia.

Australian Bureau of Statistics (ABS) revealed May’s retail spending totalled $35.9 billion nationwide.

Other retailing – including cosmetics, sports and recreational goods – saw the strongest growth in May (up 3%) year-on-year along with the staple category of food (up 3%). Cafes, restaurants and takeaway saw a modest increase (up 0.9%), along with household goods increasing modestly (up 0.1%) year-on-year after five months of consecutive declines. Clothing, footwear and accessories declined (down 0.2%) along with a drop in department store spending (down 1.7%) Both recorded year-on-year declines for the third consecutive month.

Overall growth was recorded by all states and territories year-on-year, led by Tasmania (up 4.4%) followed by Western Australia (up 3.5%), the Northern Territory (up 2.9%), Queensland (up 2.6%), Victoria (up 1.7%%). Marginal growth was recorded in South Australia (up 1.3%), ACT (up 1%) and New South Wales (up 0.4%).