ABS hardware retail stats May 2019

The Australian Bureau of Statistics (ABS) has released stats for retail sales in Australia for May 2019. Compared with May 2018, the figures show a rise of around 1.95% for Australia overall, reaching $1648 million. On a trailing 12-month basis, overall Australian sales to May 2019 increased by 2.24%.

On a state and territory basis, Victoria (VIC) showed the strongest lift in month-on-month figures, increasing by 9.34% over May 2018. This sharply contrasted with all the other regions, with the next highest figure just 1.33% for the Australian Capital Territory (ACT). New South Wales managed only a 0.48% lift, while Queensland increased by 2.26%, with only Tasmania performing worse, with a loss of 2.28%.

Looking at the states and territories on a 12-month trailing basis, the numbers look better for most regions - indicating that May 2019 had particularly poor results. VIC is still significant ahead, with growth of 8.32%, but the ACT shows growth of 4.97%, and South Australia (SA) lifted by 3.37%.

Chart 2, which shows the percentage change for trailing 12-month numbers, shows some interesting developments. Both VIC and Western Australia (WA) are breaking away from the rest of the pack, with VIC outperforming, and WA underperforming the average.

Analysis

At the moment, it's difficult to really work out exactly why VIC is outperforming the other states to such an extent. It is certainly the state with the largest population gains in recent times, which is a natural driver of construction spending.

Anecdotally, it does seem there has been an increase in spending on renovations, especially the upgrading of established housing in the inner suburbs of Melbourne which have higher-priced housing. However it will be another three or four months until enough supporting statistics have emerged to indicate where the growth is coming from.