Jobs figures prove retail sector is very much alive
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.
Frequently Asked Questions about this Article…
According to ABS labour force numbers, the retail sector added 47,000 jobs in the year to May and just over 34,000 jobs in the three months to May. For everyday investors, rising retail employment suggests stronger consumer activity and can be a positive sign for retail stocks and sectors tied to domestic spending.
Retail turnover rose 3.1% in April (seasonally adjusted) compared with a year earlier. Higher turnover signals stronger sales, which can boost listed retailers’ earnings prospects and investor sentiment toward companies exposed to Australian consumer spending.
The article notes several strong performers: JB Hi‑Fi surged 76.9%, Breville jumped 67.4%, Wesfarmers rose 27.8% and Woolworths was up 20.6% this financial year. These gains reflect robust demand in parts of the retail sector.
Healthcare was a major contributor, adding 43,000 jobs in the year to May. Overall, Australia added 127,000 jobs (a 1.1% increase) over the period. For investors, strong hiring in healthcare and a broad-based jobs rise can support diversification into sectors beyond retail.
Mining shed almost 16,000 jobs in the year to May, with employment in Western Australia falling noticeably while holding up in Queensland, according to ANZ. Fewer mining jobs can reflect a later stage of the mining investment cycle and may help explain weaker domestic resource sector activity even if commodity prices shift.
The Aussie dollar fell to about US$0.92, a roughly 10% drop from last year’s average cross rates. AMP Capital’s chief economist said that could translate to about a 3% profit increase for some Australian companies with significant overseas sales, potentially leading to earnings upgrades for exporters and internationally exposed firms.
Citi economist Josh Williamson pointed to stronger sales of consumption items from small businesses and non‑listed companies. In real terms, year‑to‑March sales were notably higher for durable goods like vehicles (up 17%) and for furnishings and house equipment (up 4.1%), as well as a range of service items including health and education.
The Australian SPI futures pointed to a sluggish start to the week, down 33 points (0.7%), and Australian shares finished lower last week, down 1.1%. The falls followed US Federal Reserve chairman Ben Bernanke outlining plans to end quantitative easing, a move that has influenced global markets and the Australian dollar.
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