AUSTRALIA DATA: Retail Sales Surprise Lower, Weather May Have Influenced
Australian April retail sales were weaker than forecast, falling 0.1%m/m, against a +0.3% forecast, which was also the March outcome. Data on building approvals was also weaker than forecast, down 5.7%m/m, against a 3.0% forecast rise. The prior month was -7.1%m/m, slightly better than originally reported. Private sector home approvals were better at +3.1%m/m (versus -1.9%m/m in March). Private sector credit was +0.7%m/m, better than the 0.5% forecast.
- For retail sales, the industry break down saw food off 0.3%m/m, while apparel and department stores were both down 2.5% in the month. This follows falls for these segments in March as well.
- Positives were in terms of cafes, up +1.1%m/m and household goods, +0.6%m/m. Both these segments were down in March in m/m terms.
- The ABS notes: "‘Falls were partly offset by a bounce-back in Queensland as businesses recovered from the negative impacts of ex-Tropical Cyclone Alfred last month.’" It added: "Clothing retailers told us that the warmer-than-usual weather for an April month saw people holding off on buying clothing items, especially new winter season stock,’ Mr Ewing said."
- Outside of the rise in spending in QLD, we had a modest rise in spending in WA, both all other states and territories saw falls, speaking to a generally soft underlying result.
- In y/y spending was 3.8%, see the chart below. In nominal terms spending trends have moves sideways since the start of the year, as fiscal incentives from H2 2024 have waned.
Fig 1: Australia Retail Sales Y/Y
Source: MNI - Market News/Bloomberg
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CHINA: CAIXIN PMI Surprises to the Upside But Grey Clouds Ahead
- In what no doubt will be pleasing to authorities, China’s CAIXIN PMI Manufacturing for APRIL rose +50.4 beating expectations for a contraction.
- As the CAIXIN is a broader representation of corporates, this will be pleasing and suggests that to now there has been some form of recovery in corporate activity.
- Nevertheless, it is still a significant contraction from the month prior result of +51.2 but beat market expectations that it would contract to +49.7.
- This marks the lowest reading for the year and possibly spells the beginning for corporates of seeing the impact of the trade war.
- Output fell to +51.6 from +51.8 and new orders were down from the prior month.
MNI: CHINA APR CAIXIN MANUFACTURING PMI 50.4 VS 51.2 IN MAR
- CHINA APR CAIXIN MANUFACTURING PMI 50.4 VS 51.2 IN MAR
NEW ZEALAND: Businesses Less Certain On Outlook, Gradual Recovery Continues
ANZ business confidence fell to 49.3 in April from 57.5, the lowest level since July 2024, the month before the start of the RBNZ’s easing cycle. The activity outlook moderated to 47.7 from 48.6, which remains above February’s 45.1. On a more positive note, the assessment of activity compared to a year ago rose 10 points to 11 driven by services and signalling a strong start to Q2 for GDP growth. Price/cost components trended higher over Q1 but were mixed in April but inflation expectations were stable around 2.6%.
NZ ANZ business activity outlook vs employment intentions
Source: MNI - Market News/LSEG
- It is likely that the survey was impacted by US tariff announcements, as ANZ noted that “forward-looking activity indicators were sharply lower in the late-month responses”. Export intentions fell 5 points to 12.2 with manufacturing down 7.6 points, while investment intentions were steady around 17.2.
- Employment compared to a year ago rose to +1.5 from -6.2 with services, construction and agriculture showing more jobs, while employment intentions rose 2.5 points to 18.1, the highest since July 21. This is in line with filled jobs and vacancy data showing a turn in the labour market. Wages expectations a year ahead rose over a point to 81.3.
- Cost expectations 3 months ahead rose to 77.9 from 74.1, highest since September 2023, while pricing intentions moderated almost 2 points to 49.4, signalling some margin squeeze. Profit expectations fell 1 point.
NZ ANZ business survey costs/prices
