Growth, inflation and labour market all easing
2022 started slowly on account of the Omicron wave but is now really picking up, notably in areas like hospitality and clothing and footwear.
2022 started slowly on account of the Omicron wave but is now really picking up, notably in areas like hospitality and clothing and footwear. Household goods and department stores are holding up, although we see some weakness in other retail.
While our headline ABS retail trade forecast points to rather moderate monthly growth in February, this likely reflects esoteric elements of our mapping equations – the NAB cashless index recorded 1.4% growth in the month, compared to our ABS forecast of 0.4%. That said, growth across industries is uneven and we continue to see signs of consumers shifting spending away from food (i.e. cooking at home) towards dining out.
The NAB Monthly Business Survey for February, released yesterday, saw strong results following the earlier Omicron weakness, although it was taken pre-Ukraine. Labour availability continues to be a challenge for many retail businesses, although purchase costs continue to grow at a faster rate.
For more information, please see the NAB Cashless Retail Sales Index (February 2022)
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