Retail spending in May rose 4.6 per cent year on year to $24.1 billion, according to data released by Australian Bureau of Statistics (ABS).

The monthly retail trade figures released by the ABS show month on month sales for May 2015 grew by 0.3 per cent.

ARA executive director, Russell Zimmerman, said it was important for retailers to be aware of annual growth of the industry as opposed to monthly growth, as this is the figure most retail businesses use in their own reporting.

“Year on year figures provide the most accurate measure of the sector’s performance,” said Zimmerman.

He attributed the strong yearly growth to a more friendly Federal Budget in May 2015, compared to 2014.

“Consumers appear to have been more confident with the government’s more conservative budget, and that has played out in the pleasing boost to May 2015 retail trade figures,” Zimmerman said.

“In addition to the more appealing spending conditions, many states have seen an earlier winter in 2015, driving more shoppers into stores for winter essentials such as heating appliances and winter fashions.”

On a monthly basis, the ABS reported increases in food retailing, 0.7 per cent; household goods retailing. 0.9 per cent; and other retailing, 0.3 per cent. There were falls for department stores, 1.4 per cent; clothing, footwear and personal accessory retailing, 0.8 per cent; and cafes, restaurants and takeaway food services, 0.2 per cent.

Year on year figures for May 2015 show a positive picture of retail growth, with gains in household goods retailing, 9.5 per cent; clothing, footwear and personal accessory retailing, 8.8 per cent; food retailing, four per cent; cafes, restaurants and takeaway food services, 3.2 per cent; department stores, 1.6 per cent; and other retailing, 1.4 per cent.

National Retail Association (NRA) CEO, Trevor Evans, agreed there had been a more positive consumer reaction to the Federal Budget.

He said strong trading results ahead of Mother’s Day and a cut to official interest rates contributed to buoyant retail trade figures for May.

“We know that a lot of the commentary and speculation around last year’s budget prompted shoppers to keep their wallets in their pockets for a couple of months, until they realised the budget would have minimal influence on their circumstances,” Evans said.

“That’s why we were pleased to see a positive public and media response to this year’s budget. This positive sentiment, coupled with the incentives for small business to invest in capital equipment, has prompted a surge in spending in the latter part of May.

“We can expect to see these results carried through into the June trade figures as well.

“Members have also told us that they had a strong sale period in the early part of May, driven by Mother’s Day gift spending.

“And May also saw the Reserve Bank cut the cash rate for a second time this year, which has also helped boost confidence for consumers and households.

“Taken together, these factors have produced a very welcome continuation of the modest but steady growth in retail trade over the last 18 months.”

By state, NSW continues to be the strongest state in May, with growth of 0.7 per cent; followed by ACT, 0.9 per cent; Tasmania, 0.6 per cent; Queensland, 0.2 per cent;and Western Australia, 0.2 per cent.

South Australia and the Northern Territory were unchanged, and turnover in Victoria declined by 0.1 per cent.

“While the continued growth is welcome, it’s clear that some retail categories are performing better than others, and some areas of the country still have some catching up to do,” Evans said.

“Nonetheless, we welcome the positive results and look forward to seeing them continue.”

Retail Council CEO, Anna McPhee, said May’s increase in consumer consumption was buoyed by the post-budget confidence boost and decision by the RBA to lower the cash rate to two per cent.

“On budget night the Retail Council said budget announcements together with the RBA cash rate decision would deliver a boost to consumers, and May’s retail figures certainly show a positive and immediate response to these announcements,” McPhee said.

“What is positive for the economy is that retail sales growth of 4.7 per cent year on year is heading in the right direction. However sustainable momentum will be needed before retailers can have real confidence that the sector can look forward to returning to long term annual average growth of six per cent.”