Growth, inflation and labour market all easing
Growth in the NAB Online Retail Sales Index is back in positive territory.
NAB Chief Economist, Alan Oster commented:
In month-on-month terms, growth in the NAB Online Retail Sales Index is back in positive territory, with an acceleration in October, on the back of slight growth in September. The latest result has also helped improve the year-on-year metric, albeit the measure continues to contract. As mentioned previously, this is mostly due to the base effects from the lockdown in 2021, which boosted online sales.
This base effect is clearly evident in the results for VIC, NSW, and ACT. In year-on year terms however, these results, like the headline, are an improvement on the September observations. This may indicate that the base effects are beginning to ease. NSW, the ACT, and Victoria ended lockdowns during October 2021, and a return to in-store sales ensued. Conditional on whether the recent results form a trend, we could see year-on-year growth back to neutral by the end of the year. Having said that, cost of living pressures, driven by strong inflation and the impact of higher interest rates, are likely to temper any resurgence.
By category this month, media, and personal and recreational goods, were clear performers. With growth in ten of the past twelve months, media has contributed over a third of all online sales growth over the same period, well above its weight in the index. By contrast, with generally sluggish sales over the past twelve months, personal and rec goods’ share of the index has slipped somewhat. Both categories have however seen the average spend per transaction increase over the past year, more so for media. This may be partly attributed to inflation, where spend has increased at a rate beyond that of the volume of transactions. One of the largest increases in average spend observed over the past twelve months was for homewares and appliances, which accords well with external price measures.
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