Retail sector starting to get a roll on

The retail sector is looking little brighter with the fifth consecutive month of sales growth, a run last achieved in 2007.

The GFC recovery period has been a difficult one for many retailers, but it is now more than a year since massive cash handouts were provided and, with interestrates back in the ‘normal’ range, retailers can be somewhat optimistic about thefuture, according to the latest Access Economics report.

AE director David Rumbens said the creation of some 350,000 additional jobs over the past year is a “tremendous springboard” to produce a period of stronger retail growth over the next year.

“Consumers have been cautious over the past year,” he said. “But the current degree ofconsumer caution may fade going forward – consumer confidence has lifted inrecent months on the back of pauses in interest rates and a rising Australian dollar.”

By financial year, Access Economics expects real retail sales to grow by a solid 3.2% in 2010/11, lifting to 3.7% in 2011/12 during the peak of the next housing construction upswing.

Over the past year, retail sales growth in the south east of Australia has generallyheld up better than elsewhere. Victoria, New South Wales, South Australia andthe ACT are all showing some retail gains on the back of job gains, but all also needto be wary about the damage further interest rate rises may do.

The two areas where retail sales have fallen over the past year have been Tasmania (where the unemployment rate has been rising not falling), and Queensland (with its housing and non-residential building sectors still struggling to recover).