This follows a rise of 0.4 per cent in June 2019. The trend estimate for Australian retail turnover rose 0.1 per cent in July 2019, following a 0.2 per cent rise in June 2019. Compared to July 2018, the trend estimate rose 2.4 per cent.
“There were falls in four of the six industries and six of the eight states and territories in July,” said Ben James, Director of Quarterly Economy Wide Surveys. “Cafes, restaurants and takeaway services (-0.6 per cent) led the falls. There were also falls in Clothing, footwear and personal accessory retailing (-1.0 per cent), Other retailing (-0.4 per cent), and Department stores (-0.2 per cent). Food retailing (0.3 per cent), and Household goods retailing (0.1 per cent) rose this month”.
In seasonally adjusted terms, there were falls in Queensland (-0.2 per cent), New South Wales (-0.1 per cent), South Australia (-0.5 per cent), Victoria (-0.1 per cent), the Australian Capital Territory (-0.5 per cent), and Tasmania (-0.1 per cent). There were rises in Western Australia (0.6 per cent), and the Northern Territory (0.3 per cent).
Online retail turnover contributed 6.1 per cent to total retail turnover in original terms in July 2019. This is unchanged from June 2019. In July 2018, online retail turnover contributed 5.5 per cent to total retail.
They said that the trend estimate for total new capital expenditure fell by 0.7% in the June quarter 2019 while the seasonally adjusted estimate fell by 0.5%.
The trend estimate for buildings and structures fell by 1.8% in the June quarter 2019 while the seasonally adjusted estimate fell by 3.3%.
The trend estimate for equipment, plant and machinery rose by 0.6% in the June quarter 2019 while the seasonally adjusted estimate rose by 2.5%
The annual trend changes were down 1.3% overall, with buildings and structures down 5% and equipment plant and machinery up 3.2%.
Overall this will likely reduce the already weak-looking GDP out turn.
Looking ahead the estimates do not look too bad, but given the external and local risk factors, the final results may be lower.
Total capital expenditure
Estimate 7 for total capital expenditure for 2018-19 is $122,119m. This is 2.3% higher than Estimate 7 for 2017-18.
Estimate 7 is 0.1% lower than Estimate 6 for 2018-19.
Estimate 3 for total capital expenditure for 2019-20 is $113,404m. This is 10.7% higher than Estimate 3 for 2018-19.
Estimate 3 is 14.9% higher than Estimate 2 for 2019-20.
Buildings and structures
Estimate 7 for buildings and structures for 2018-19 is $65,330m. This is 2.8% lower than Estimate 7 for 2017-18.
Estimate 7 is 3.7% lower than Estimate 6 for 2018-19.
Estimate 3 for buildings and structures for 2019-20 is $66,922m. This is 12.3% higher than Estimate 3 for 2018-19.
Estimate 3 is 12.9% higher than Estimate 2 for 2019-20.
The ABS released their June 2019 “Construction Work Done, Australia, Preliminary” today. It paints a picture of slowing momentum once again. This will flow into a weaker GDP number ahead.
The trend estimate for total construction work done fell 2.7% in the June quarter 2019.
The seasonally adjusted estimate for total construction work done fell 3.8% to $48,778.0m in the June quarter.
The trend estimate for total building work done fell 2.2% in the June quarter 2019.
The trend estimate for non-residential building work done fell 0.8% and residential building work fell 3.0%.
The seasonally adjusted estimate of total building work done fell 5.7% to $28,506.2m in the June quarter.
The trend estimate for engineering work done fell 3.1% in the June quarter.
The seasonally adjusted estimate for engineering work done fell 1.1% to $20,271.8m in the June quarter.
The construction sector is in a downtrend, with activity having peaked in mid-2018. This reflects: (1) the turning down of the home building cycle; (2) a pull-back in public works; and (3) a further winding down of private infrastructure activity led by the mining sector (although this dynamic has largely run its course).
With the construction sector representing around 13% of the economy this result will dent Q2 GDP, potentially in the order of 0.4ppts – depending upon how these quarterly partials flow through to the national accounts estimates.
The housing downturn still has further to go and will weigh on conditions throughout 2019 and into 2020.
On public works, there is a sizeable work pipeline and governments are adding projects to the investment pipeline – suggesting that the segment will be more supportive of conditions over the forecast period. On private infrastructure, commencements have picked-up somewhat (eg some iron ore projects have proceeded in response to the recent elevated prices) and the work pipeline has increased – pointing to an emerging lift in activity during the year ahead.
Australia’s trend unemployment rate increased in July 2019 to 5.3 per cent, from 5.2 per cent in June, according to the latest information released by the Australian Bureau of Statistics (ABS).
ABS Chief Economist Bruce Hockman said: “Australia’s trend unemployment rate increased to 5.3 per cent in July 2019, the same level as this time last year.”
“The trend participation rate increased further to 66.1 per cent, while employment growth continues to show strength,” added Mr Hockman.
Employment and hours
In July 2019, trend monthly employment increased by around 24,600 persons. Full-time employment increased by 15,100 persons and part-time employment increased by 9,600 persons.
Over the past year, trend employment increased by 339,200 persons (2.7 per cent) which was above the average annual growth over the past 20 years (2.0 per cent).
The trend monthly hours worked increased by less than 0.1 per cent in
July 2019 and by 1.8 per cent over the past year. This was slightly
above the 20 year average year-on-year growth of 1.7 per cent.
Underemployment and underutilisation
The trend monthly underemployment rate remained steady at 8.4 per cent
in July with no changes over the past year. The trend underutilisation
rate decreased by 0.1 percentage points over the year.
States and territories trend unemployment rate
The trend unemployment rate remained steady in most states and
territories, except for South Australia (up 0.2 percentage points) and
Queensland and Northern Territory (up 0.1 percentage points).
Over the year, unemployment rates fell in New South Wales, Victoria,
Western Australia and the Australian Capital Territory, and increased in
Queensland, South Australia, Tasmania and the Northern Territory.
The trend Wage Price Index (WPI) rose 0.5 per cent in the June quarter 2019 and 2.3 per cent through the year, according to figures released today by the Australian Bureau of Statistics (ABS). These are lower than projected in the budget, and highlights the stresses in the economy. Without one-off factors the numbers would be even lower.
Seasonally adjusted private sector wage growth was 0.5 per cent, while public sector wage growth was 0.8 per cent in the June quarter 2019.
ABS Chief Economist, Bruce Hockman said: “Wage growth continues at a
steady rate in the Australian economy on the back of strong public
sector growth over the quarter. The most significant contribution to
wage growth this quarter came from the public sector component of the
health care and social assistance industry, where a number of large
increases were recorded in Victoria under a plan to ensure wage parity
with other states.”
In original terms, annual wages growth to the June quarter 2019 by industry ranged from 1.7 per cent for wholesale trade to 3.3 per cent for health care and social assistance.
Western Australia recorded the lowest through the year wage
growth of 1.6 per cent while Victoria recorded the highest of 2.9 per
cent.
Woolworths Holdings announced yesterday it will book an impairment of $437.4 million against David Jones, reducing the valuation of the department chain to about $965 million. This write down is the second since 2018. Woolworths Holdings bought the prestigious network of stores in 2014 for $2.1 billion.
A Woolworths spokeswoman said
This writedown reflects sustained and unprecedented economic pressures and structural changes in the Australian market. The retail sector in Australia is currently in recession, and the Australian economy has slowed to its weakest level since the global financial crisis in 2009
Today the ABS said the trend estimate for Australian turnover rose 0.2% in June 2019. This follows a rise of 0.2% in May 2019 and a rise of 0.2% in April 2019. The seasonally adjusted estimate for Australian turnover rose 0.4% in June 2019. This follows a rise of 0.1% in May 2019 and a fall of 0.1% in April 2019. The original estimate for Australian turnover fell 1.5% in June 2019. The original estimate for chains and other larger retailers fell 0.1% in June 2019. The original estimate for smaller retailers fell 4.6% in June 2019.
The following states and territories rose in trend terms in June 2019:
Victoria (0.3%), Queensland (0.4%), South Australia (0.3%), the
Australian Capital Territory (0.4%), Tasmania (0.3%), and the Northern
Territory (0.2%). New South Wales (0.0%), and Western Australia (0.0%)
were relatively unchanged in trend terms in June 2019.
FOOD RETAILING
In current prices, the trend estimate for Food retailing rose 0.1% in
June 2019. The seasonally adjusted estimate rose 0.1%. By industry
subgroup, the trend estimate rose for Supermarkets and grocery stores
(0.1%), was relatively unchanged for Liquor retailing (0.0%), and fell
for Other specialised food retailing(-0.4%). The seasonally adjusted
estimate rose for Supermarkets and grocery stores (0.5%), and fell for
Other specialised food retailing (-3.8%), and Liquor retailing (-0.1%).
HOUSEHOLD GOODS RETAILING
In current prices, the trend estimate for Household goods rose 0.2% in June 2019. The seasonally adjusted estimate rose 0.2%. By industry subgroup, the trend estimate rose for Electrical and electronic goods retailing (0.4%), and Furniture, floor coverings, houseware and textile goods retailing (0.3%), and fell for Hardware, building and garden supplies retailing (-0.2%).
CLOTHING, FOOTWEAR AND PERSONAL ACCESSORY RETAILING
In current prices, the trend estimate for Clothing, footwear and personal accessory retailing rose 0.6% in June 2019. The seasonally adjusted estimate rose 2.0%. By industry subgroup, the trend estimate rose for Clothing retailing (0.5%), and Footwear and other personal accessory retailing (0.5%).
DEPARTMENT STORES
In current prices, the trend estimate for Department stores rose 0.2% in June 2019. The seasonally adjusted estimate fell 0.6%.
OTHER RETAILING
In current prices, the trend estimate for Other retailing rose 0.4% in June 2019. The seasonally adjusted estimate rose 0.6%. By industry subgroup, the trend estimate rose for Other retailing n.e.c. (0.4%), Pharmaceutical, cosmetic and toiletry goods retailing (0.4%), and Other recreational goods retailing (0.2%), and was relatively unchanged (0.0%) for Newspaper and book retailing.
CAFES, RESTAURANTS AND TAKEAWAY FOOD SERVICES
In current prices, the trend estimate for Cafes, restaurants and takeaway food services rose 0.2% in June 2019. The seasonally adjusted estimate rose 0.5%. By industry subgroup, the trend estimate rose for Cafes, restaurants and catering services (0.2%), and Takeaway food services (0.1%).
Online retail turnover contributed 6.1 per cent to total retail turnover in original terms in June 2019. In June 2018 online retail turnover contributed 5.7 per cent to total retail.
For the June quarter 2019, there was a rise of 0.2 per cent in seasonally adjusted volume terms. This follows a fall of 0.1 per cent in the March quarter 2019. The quarterly rise in volumes was led by Department stores (1.4 per cent), Cafes, restaurants and takeaway food services (0.5 per cent), Clothing, footwear and personal accessory retailing (0.7 per cent), Other retailing (0.4 per cent), and Household goods retailing (0.1 per cent). Food retailing (-0.4 per cent) fell in seasonally adjusted volume terms.
Nab’s online retail tells the same story:
The NAB Online Retail Sales Index contracted (-1.6%) in June on a
month-on-month, seasonally adjusted basis. This follows from a rebound
in May (3.4% mom, s.a).
In year-on-year terms, the NAB Online Retail Sales Index remains
positive, albeit barely, up 0.5% (y/y, s.a.) in June. However, this
result is compared to June 2018, and it is worth noting that the period
January to September 2018 was one of the strongest growth periods in the
NAB online retail sales index history.
After a strong May result, June data shows sales for three of the
eight online retail categories contracting in month-on-month growth
terms. The largest sales category, homewares and appliances (-7.1% mom,
s.a.), was a key contributor to the headline result given its relative
weight in the index. Media, and to a lesser extent, grocery and liquor,
were the two other categories to contract in the month. The smallest
sales category, takeaway food, recorded the fastest growth in the month.
For more detail, see Charts 3, 5, 7 & 8 below.
In month-on-month terms, all states and territories except WA (2.4%
mom, s.a.) and ACT (4.5%) recorded a contraction in sales growth.
Tasmania (-6.4%) led the monthly decline in sales growth.
In June, spend growth in metro areas was higher, at 0.4% (mom,
s.a.), relative to regional (-3.1%). WA metro areas went against the
broader result to record the highest online retail spend growth (+5.4%)
in the month. The above mentioned state contraction in online retail
sales for Tasmania was associated with a larger contraction in metro
area sales, along with a smaller contraction in regional, albeit with
sales for the latter also falling last month. See Charts 15 and 16 for
more detail.
While contracting, at -1.6%, domestic online retailers performed
better in month-on-month terms relative to international competitors
(-1.9% mom, s.a.). In year-on-year terms, from our series, considerable
weakness in international online sales remains. See charts 13 and 14,
and table 3 for category growth and share.
We estimate that in the 12 months to June, Australians spent $29.32
billion on online retail, a level that is just over 9% of the
traditional bricks and mortar retail sector (May 2019, Australian Bureau
of Statistics), and about 12.7% higher than the 12 months to June 2018.
