Retail sales fell 0.2% in seasonally adjusted terms during September, but the first home buyers grant continues to help the housing market, with building approvals up 2.7%.
The fall in retail sales was tempered by the fact that sales actually increased 0.4% in trend terms during September, following an increase of 0.7% during August, according to the latest figures from the Australian Bureau of Statistics.
In trend terms, every industry except “other retail” recorded an increase. Food retailing grew by 0.4%, housing good retailing by 0.2%, clothing, footwear and personal accessory retailing by 0.4% and department stores by 0.1%. Cafes, restaurants and takeaway food services grew by 1%.
All states recorded an increase, with NSW, VIC and the ACT all recording increases of 0.5%.
Meanwhile, the total value number of building approvals grew by a seasonally adjusted 2.7% from August to September.
The estimate for private sector housing approvals rose by 0.3%, and has continued to rise for the past nine months. The estimate for “other dwellings” rose by 14.6%, while the total value of building approvals fell by 22.4%.
The seasonally adjusted estimate for the value of new residential building approvals rose by 0.8%, while the value of alterations and additions approved fell by 1%.
Activity in the services sector has grown for the first time in 19 months due to a higher take up of retail goods and recreational services, according to the latest Australian Industry Group-Commonwealth Bank Performance of Services index.
The index grew by a seasonally adjusted 5.5 points to 54.8 in October, above the 50-point level separating expansion from contraction.
“The move into positive territory in the services sector reflects improved demand for services driven by a marked lift in consumer confidence,” Australian Industry Group chief executive Heather Ridout said in a statement. “Housing-related sectors such as finance and insurance, and property and business services, are also experiencing a period of growth.”
Seven out of the nine sub-sectors grew compared to just five in September, with sales and new orders moving into positive territory.
Shares open higher despite Wall Street fall
The Australian sharemarket has opened slightly higher today, following mixed results in the US overnight where new data revealed factory orders have grown.
The benchmark S&P/ASX200 index was up 5.2 points or 0.11% to 4536.7 at 12.00 AEST. The Australian dollar also increased slightly to US90c.
Commonwealth Bank shares increased 1% to $51.79, while ANZ also lifted 1.2% to $22.85. Westpac gained 1% to $25.68, as Woolworths lost 0.5% to $27.98.
Westpac has said its credit cycle has peaked, and that it predicts a drop in the number of bad debts over the New Year, following the company’s announcement of an 8% drop in cash earnings for the 2009 financial year.
Revenue increased 42.2% to $16.5 billion, while net profit fell by 10.7% to $3.4 billion. Impairment charges rose by 173%, or $2.09 billion, to $3.29 billion.
“Against this backdrop, however, the Westpac group enters the 2010 financial year with solid business momentum, with a strengthened balance sheet and excellent provisioning cover,” the bank said in a statement.
Telstra reaffirms guidance, but workers to strike
Meanwhile, Telstra has reaffirmed its full-year cashflow guidance, with chief executive David Thodey saying the forecast remains despite “challenging times”.
“We expect continued top and bottom line growth and free cashflow of $6 billion this financial year,” he said.
But the company is set for some new trouble this week, with workers expected to strike after negotiations regarding bargaining agreements have reached a dead-end. The Communications, Electrical and Plumbing Union said the company is punishing employees.
“(Telstra) is waging war on its employees by offering only a pathetic pay rise over three years and refusing to allow its employees to have access to arbitration for fair treatment,” union president Len Cooper told AAP.
Overseas, Wall Street stocks fell despite new results that showed the number of factory orders across the country have grown.
Orders rose by a stronger than expected 0.9% during September, according to the Commerce Department, with the result being the fifth month out of the past six recording an increase. The Dow Jones Industrial Average fell 17.53 points, or 0.18%, to 9,771.91
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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