Pump it up: Case for rate hike builds as energy appliance rebate lifts sales
The State Government’s energy savers rebate for electrical items has been a factor in a surprising rise in retail sales in September, but it may also add to pressure for another interest rate hike.
The lift in retail sales has been attributed partly to the introduction of the Climate Smart Energy Savers Rebate in Queensland.
The Australian Bureau of Statistics said the increase of 0.9 per cent was related to the release of the new iPhone, a warmer than usual start to Spring and the Queensland Government’s energy saver rebate on electrical items, which created a short-term lift in sales.
ANZ economists Madeline Dunk and Adelaide Timbrell said the bumper result for September takes the retail sales back to slightly above where they were in September 2022.
“The fact that it has taken 10 months to get back to this level highlights the underlying weakness in the retail sector right now, particularly given the rapid pace of population growth,” they said.
“Today’s data supports our call that the RBA will increase the cash rate by 25 basis points (0.25 per cent) at its November meeting.”
The ABS said the warmer start to Spring meant better sales for households goods, clothing, hardware and gardening.
“Also adding a boost to turnover in household goods retailing was the release of a new iPhone model and the introduction of the Climate Smart Energy Savers Rebate in Queensland,” the ABS said.
However, retail sales in Queensland lifted only 0.5 per cent in September. That was an increase on August, but was well behind the southern states.
Tasmania jumped by 1.8 per cent and sales in NSW and Victoria were up 1.3 per cent and 1.2 per cent, respectively while South Australia was up 1 per cent.
Westpac said its own card data showed that while retail card activity was tracking a gradual firming off a weak base, there may be some signs of an underlying softening emerging, as transitory boosts fade.