Retail spending rose 4.1 per cent in December, seasonally adjusted, compared to December 2013, according to the latest retail trade figures released by the Australian Bureau of Statistics (ABS).

Despite falling short of industry expectations of six per cent, retail groups have labelled the result as “a very positive sign for the retail industry”.

Month on month retail spending rose by 0.2 per cent in December, a slight rise from 0.1 per cent in November.

Total retail spending was $23.806 billion in December, up from $23.755 billion in November.

Clothing, footwear,and personal accessory retailing recorded the highest amount of growth for the month at 2.7 per cent; followed by food retailing, 0.3 per cent.

Growth remained unchanged for cafes, restaurants, and takeaway food services, and other retailing, while department stores reported a drop of 0.9 per cent. The household goods category saw a decline of 0.4 per cent.

By state, Queensland reported an increase of 0.6 per cent; followed by Western Australia, 0.5 per cent; Australian Capital Territory, 0.4 per cent; and New South Wales, 0.2 per cent. Spending fell in Tasmania by 1.3 per cent, along with South Australia, 0.4 per cent; and Northern Territory 0.1 per cent.

Russell Zimmerman, executive director of the Australian Retailers Association (ARA), said the ARA had hoped December retail trade would see six year per cent per cent year on year growth but 4.1 per cent was “still a great achievement for the industry”.

“While most retail businesses enjoyed a steady month of sales in December, feedback from retailers is that there was a major post-Christmas sales surge which won’t be fully reflected in these December sales figures,” Zimmerman said.

“Uncertainty in the build up to the Victorian, New South Wales, and Queensland elections may have also had an impact on confidence in the lead up to Christmas, which is always the case with elections.”

Australian National Retailers’ Association (ANRA) CEO, Anna McPhee, said despite retail sales continuing to grow since September 2013, soft growth in the final months of the year ended the sector’s expectation of reaching the long term average annual growth of six per cent in 2014.

“Despite the glacial pace, retail sales still continued to grow for the seventh consecutive month. This pattern of persistent retail sales growth, on the back of record low interest rates, is good for the economy,” McPhee said.

“Retailers welcome the decision taken by the RBA in lowering the cash rate earlier this week, it is now a wait and see whether more needs to be done to rebuild confidence before we see further improvements to activity in the retail sector and the recurring benefits this delivers to the economy more broadly.

Trevor Evans, CEO of the National Retail Association, said the results suggest Australia is heading back in the right direction, but that the momentum is fragile.

“Today’s figures come right on the back of the Reserve Bank’s decision to cut the official interest rate, which, on the face of it, is all welcome news for retailers, and likely to put more money into the pockets of consumers in the coming months,” Evans said.

“At the same time, the RBA decision clearly indicates some nervousness about the ongoing strength of the economy. So in order to maintain consumer confidence we are calling on political leaders to put an end to the current speculation and ensure government gets on with the job of governing.”

Evans said the sector had enjoyed relatively consistent and modest growth throughout 2014, after previous years of economic weakness and political instability.

“Today’s figures, coupled with Tuesday’s rate cut, send a message to the Federal Government and the opposition – yes, we are back on the right track but this could be undermined if a focus on essential policy settings is abandoned in order to deal with distracting party speculation and instability.

“Our leaders need to move quickly towards a ‘back to basics’ approach. It is time to get on with the job and allow businesses to move forward and to create employment and prosperity throughout the coming year,” he said.