Retail sales rise 4 times faster than expected

Retail sales have jumped almost five per cent over the year to February 2013 in a sign of relief for small businesses, according to the latest data from the Australian Bureau of Statistics.

Statistics also indicate that sales rose by 1.3 per cent month-on-month - more than four times the rise expected by economists (surveyed by Bloomberg News) and builds on the 1.2 per cent rise in January 2013. This also represented the strongest back-to-back rises in nearly four years.

Household goods retailing and restaurant/takeaway food retailing were the biggest contributors to the monthly rise, increasing by 1.6 per cent and 1.3 per cent respectively. Department store revenue jumped 1.6 per cent in the month to February.

Location-wise, the ACT saw sales rise by 2.6 per cent, followed by Queensland's 1.9 per cent rise and Western Australia's 1.8 per cent increase. New South Wales retail sales rose 1.4 per cent, while Victoria rose 1.1 per cent. The increases were partly offset by falls in South Australia (down 0.4 per cent), Northern Territory (down 1.4 per cent) and Tasmania (down 0.6 per cent). The ABS stated that over the longer term, Queensland was the "strongest contributor to growth", increasing by 0.6 per cent in trend terms.

The overall positive data comes after a series of rate cuts  the Reserve Bank implemented from November 2011 to December 2012, which economists believe have stimulated consumer retail spending. According to RBA Governor Glenn Stevens, the economy is benefiting from the rate reductions.

"There are a number of indications that the substantial easing of monetary policy during late 2011 and 2012 is having an expansionary effect on the economy. Further such effects can be expected to emerge over time," Mr Stevens said.

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