Daily Commentary BY THE CURVE TEAM –

Preliminary Retail Sales Slip

24th of September, 2020

Following three months of strong growth, preliminary retail sales for August shows a dip.

Retail sales fell 4.2% for the month based on the preliminary data. Victoria led the decline, falling 12.6% as the state had strict lockdown measures imposed. Elsewhere in Australia the fall was a more muted 1.5%.

Considering retail sales remain 6% above pre-pandemic levels, the falls are not as significant as they might appear. October’s retail sales will be keenly awaited as the Jobseeker and JobKeeper payments are amended.

More encouraging for the broader economy is the containment of Covid-19 and the unwinding of lockdown measures. Victoria’s 30-day moving average is below 30, which could prompt an earlier phasing out of lockdowns than first expected.

NSW has recorded two days in a row of no community transmission, which has led to South Australia opening their border to them (us). There has also been more than 2 weeks of no mystery cases, which if maintained for another 2 weeks will mean Queensland will open their border to NSW.

There are also reports of a customised quarantine programme for international students. All these easing of restrictions will assist with the movement of people and therefore economic activity.

These updates are in contrast with the rest of the world. US case numbers have ticked back up and reports are emerging of the virus mutating in the US. Europe’s second wave continues to gather steam. Britain has imposed stricter lockdown measures, including mandating masks in public spaces, limiting gathering sizes and strongly encouraging working from home.

So long as the world struggles to contain the virus, Australia’s recovery will be limited. Certain industries such as tourism and education will be restricted, and a lack of global demand will restrict the value of our exports.

Josh Stewart

Client Relationship Manager