Australia’s Retail Sales See Sharp Decline, Exports Rise

Retail sales volumes in Australia fell at the sharpest pace since 20 years during Q2 2020 as a result of the coronavirus pandemic

Australia's Retail Sales See Sharp Decline, Exports Rise

Retail sales volumes in Australia fell at the sharpest pace since 20 years during Q2 2020 as a result of the coronavirus pandemic. According to data released by the ABS, inflation-adjusted retail sales declined by 3.4% in the second quarter of the year, a more severe reduction than economists’ forecast, which was for a decline of 3.2% instead.

The sharp drop in retail sales volumes during the period was driven by a 29.1% decline in sales at cafes and restaurants as well as a 22% in sales as clothing, footwear and personal accessory outlets, mainly driven by lockdowns due to the pandemic. Economists are now anticipating the weak retail sales and consumer spending figures to weigh heavily on Australia’s Q2 GDP this year.

On a positive note, however, exports from Australia saw an increase of 3% during June, boosted by an instead demand for iron ore and other products by China. Australia’s trade surplus rose to AUD 8.2 billion during June, while the overall trade surplus for Q2 2020 increased to AUD 23.4 billion.

Economic outlook for the country remains less promising on account of a second wave of coronavirus infections affecting the state of Victoria, which has forced the government to reimpose lockdown measures after declaring a “state of disaster”. Even though Australia had lifted lockdown restrictions before several other countries, helping businesses reopen sooner, the possibility of a second wave are keeping consumers more cautious about coming out and spending.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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