Spending across the Australian retail sector increased by 1.1 per cent during December 2013, according to the latest Business Sales Indicator report from the Commonwealth Bank Australia.
Economy-wide spending recorded strong growth in 2013, and experts forecast this trend to continue through this year.
“The spending increase in 2013 has provided a strong foundation for further increases in 2014,” Commsec Economist Savanth Sebastian said in a January 17 media release.
Mr Sebastian attributes the growth in spending to gathering momentum in housing recovery, along with rising consumer confidence and low interest rates.
“The lower Australian dollar should also provide a boost to exports in the coming months and help alleviate the risks surrounding the rebalancing of the economy,” he said.
Weaker than expected unemployment data has caused the Australian dollar to drop to a three and a half year low, according to a January 17 media release from Insider Retail.
On January 16, the Australian Dollar was trading at 88.15 US cents, before dipping as low as 87.77 US cents over night.
This is the lowest point the dollar has fallen since July 2010, which economists attribute to December labour force figures showing Australia lost 68,000 full time jobs in 2013.
However, these dire employment figures could influence positive results for retailers in Australia, as the Reserve Bank of Australia may now consider another rate cut.
Additionally, consumer sentiment is expected to continue to rise due to support from an improving global economy outlook and the increased export opportunities that arise from the falling Australian dollar.
However, retailers in Australia are being encouraged not to let this good news prompt a relaxed approach to business.
“Regardless of this positive trend, cash flow management and efficient business practices should remain a priority,” said Commonwealth Bank General Manager Local Business Banking Lex Thornton.