Wayne Cole

SYDNEY – Australian retail sales soared above forecasts for a second consecutive month in November. The surge was due to consumers spending their savings. It is a reminder about how the economy performed before the coronavirus outbreak, which cast a shadow over Christmas.

On Tuesday, the Australian Bureau of Statistics revealed that retail sales increased 7.9% in November. This was in addition to the 4.9% growth in October after much of the country had emerged from a severe pandemic.

This exceeded all expectations and resulted in sales increasing by 5.8% over November 2013. The record A$33.41 Billion ($24.00 Billion) was set, which is a significant boost for economic growth.

A combination of increased demand and extended sales periods in November drove record sales for apparel, footwear, personal accessories, department stores, and household goods.

According to Ben James (director of quarterly economy-wide statistics at ABS), “Consumers pushed Christmas spending forward in order to profit from sales and minimize delivery and stock availability worries ahead of the holiday season.”

A slowdown in December was expected as more people shop Black Friday. However, the Omicron strain’s sudden appearance has created a new problem for the sector.

As cases escalated to more than 100,000 per day in shops and restaurants, customers have imposed a voluntary lockdown on these establishments. Meanwhile, isolation rules for contact has caused a disruption in supply chains that resulted in empty supermarket shelves and increased costs.

According to ANZ analysts, January’s spending on bank cards fell to their lowest levels since the Delta lockdowns. Sydney was and Melbourne in particular were the worst hit.

The latest survey on consumer sentiment by ANZ was published Tuesday. This indicated that there had been a 2.2% decrease in last week’s confidence.

David Plank, ANZ’s Australian economists chief, said that “the good news is people are still relatively satisfied about their financial situation.”

This could lead to a quick rebound if people feel more positive about their health.

While households still have large amounts of savings from the lengthy lockdowns and a robust labour market, they are still able to get a job and earn a living.

This is why the Reserve Bank of Australia had been positive that the economy could weather Omicron wage. However, the rapidity of its spread continues to be surprising.

Australia also benefits from the high price of its main resource exports, which is a quick win for company profits as well as government tax receipts.

On Tuesday, ABS data showed that although the trade surplus of the country was down to A$9.4B in November due to domestic spending and more imports.

Although exports increased by 2 percent in this month’s report, imports rose 66% thanks to capital gains and increases in consumption.

($1 = 1.3924 Australian dollars)