The figures come after Commonwealth Bank card data for February released earlier this week found retail spending to be the strongest since the GFC and is an encouraging sign upcoming official ABS figures for the month.
NAB’s cashless retail index grew 9.4 per cent year-on-year in February, following an 8.8 per cent increase in January, despite a 0.3 per cent decline in month-on-month spending to 0.9 per cent.
Cafes, restaurants and takeaway spending was once again the fastest growing category, up 15.8 per cent year on year, while household goods became the second fastest growing area, up 10.7 per cent year on year.
NAB card spending at department stores grew by 10.1 per cent year-on-year, while clothing and footwear sales rebounded, up 4.8 per cent year-on-year.
NAB’s cashless retail index is derived from personal transaction data on NAB platforms, around 2 million transactions each day, and is historically a good predictor for the performance of official ABS figures for a given month.
NAB’s chief economist Alan Oster is now forecasting a month-on-month increase in the ABS’s retail spending figures for February of 0.7 per cent, which would be a sharp turnaround from the -0.5 per cent result in December and the 0.1 per cent growth in January.
“The retail sector is still considered to be underperforming when compared with other industries. However, this month’s NAB Business Survey recorded the best business conditions score for the retail sector in 8 months and is now in positive territory in trend terms,” Oster said.
“Retail confidence has followed suit, picking up slightly this month in trend terms.”
Although Oster added that the results should be interpreted “with caution” due to seasonal patterns, pointing out that underlying wage growth remains subdued and cost of living pressures are still weighing on consumer wallets.
“The Forward View foresees household spending at a relatively subdued 2.5% through 2018 and 2019, before strengthening a touch to 2.7% in 2020,” he said.
By state the ACT has taken the lead in February, recording year-on-year growth of 10.4 per cent, followed by NSW at 10 per cent and Victoria at 9.6 per cent. Queensland came in last, growing 7.4 per cent year-on-year.
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.