Economic experts say surge in retail sector unlikely to last

DESPITE the strongest quarterly results for the retail sector in six years, the growth is unlikely to continue, say Deloitte Access Economics forecasters.

Analysis by the economic forecaster found while the March quarter showed 2.2% growth in retail sales, data coming in for April confirmed more modest growth.

"Employment growth is registering a pulse but it's a faint one, and in all likelihood the unemployment rate will drift up further over 2013," Deloitte partner David Rumbens wrote.

"That's not a strong grounding for robust retail sales growth.

"Consumers have also become less confident over the past couple of months as the Reserve Bank has started to push the panic button, and as that symbol of economic supremacy (the Aussie dollar being worth more than the US dollar) has quickly slipped away."

Mr Rumbens wrote while retail sales in Queensland, Western Australia and the Northern Territory showed strong growth, it was unlikely to continue through 2013.

"Over the next couple of years retailers in WA and Queensland will face challenges as major projects start to detract from economic activity rather than add to it," he wrote.

"Still, there will be some offset coming through the operation of expansion projects, and it is likely that population growth will still favour these states.

"That suggests a tightening in the band of future retail outcomes across States, rather than the ladder being tipped upside down."


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