Jobs figures prove retail sector is very much alive
Rumours of the demise of retail could be greatly exaggerated according to labour force numbers, which show the sector added 47,000 jobs in the year to May.
Retail, which employs more than a 10th of Australians with jobs, added just over 34,000 jobs in the three months to May, according to data from the Australian Bureau of Statistics.
This has coincided with a 3.1 per cent rise in retail turnover in April, seasonally adjusted, compared with a year earlier.
Listed retailers have enjoyed strong performances on the stockmarket this financial year. JB Hi-Fi has surged 76.9 per cent, while Breville has jumped 67.4 per cent.
Supermarket giants Wesfarmers and Woolworths also had high returns, up 27.8 per cent and 20.6 per cent respectively.
A growth in consumption items sales from small businesses and non-listed companies may provide further insight into the jump in retail jobs, said Citi economist Josh Williamson.
"In real terms, sales in the year to March were stronger for durable items like vehicles (up 17 per cent), furnishings and house equipment (up 4.1 per cent) and service items such as health (7.1 per cent), education (up 2.8 per cent), insurance and finance (up 3.4 per cent), communications (up 2.6 per cent) and recreation and culture (up 0.8 per cent)," Mr Williamson said.
Healthcare was the other sector that performed strongly, adding 43,000 jobs in the year to May.
Overall, the Australian economy added 127,000 jobs over the period, an increase of 1.1 per cent.
In yet another sign the mining boom is nearing its end, the sector shed almost 16,000 jobs in the year to May, according to the ABS.
"Consistent with the more advanced stage of the mining investment cycle in WA than in Queensland, mining employment in WA fell noticeably over the past year but has held up in Queensland," ANZ economist Justin Fabo said.
Investors can take some comfort in the falling Australian dollar as companies heavily exposed to overseas markets and prices, such as the big miners, enjoy a rise in commodity prices.
AMP Capital chief economist Shane Oliver said the Aussie dollar's fall to US92¢ represented a 10 per cent drop from last year's average cross rates, but this could translate as a 3 per cent profit increase for some local companies.
"It won't surprise me if we see some earnings upgrades for companies with overseas exposure," Dr Oliver said.
Meanwhile, the Australian SPI Futures market is pointing to a sluggish start to the week, down 33 points, or 0.7 per cent.
Australian shares finished lower last week, down 1.1 per cent, after US Federal Reserve chairman Ben Bernanke outlined the central bank's plan to end quantitative easing, which has been propping up financial markets and the Australian dollar.