Australia’s new motor vehicle sales rise in August, consumer spending to grow at modest pace

Australia’s new motor vehicle sales grew in sequential terms in August, stated Australian Bureau of Statistics. The rise came after the sales dropped 1.4 percent in the previous month. Monthly sales rose to 97,929. This is 2.7 percent lower than the all-time high of 100,645 that was recorded in Sept 2015.

Preference of consumers was seen for SUVs, which grew 2.2 percent in August. This is the fourth straight month of increase. However, the rise has been countered by a drop in passenger vehicles that declined 1.3 percent in the month. Meanwhile, sale of “other” vehicles declined 1 percent in August. As this category includes trucks, vans and buses, this might indicate towards a subdued activity in the business sector, said St George Economics in a research note. But on an annual basis, growth continues to stay strong.

In year-on-year terms, the overall headline figure showed that sales grew 2.9 percent and continues to indicate towards moderate growth in business and consumer spending.

State wise, sales were subdued in Queensland, NSW, WA and the ACT, where sales fell 1.4 percent, 0.6 percent, 4.5 percent and 2 percent respectively in August. On the contrary, sales grew in Tasmania, Victoria and the Northern Territory in the month. In the year-to-August, South Australia saw the strongest growth in sales, rising by 12.6 percent, followed by 12.3 percent gain in Northern Territory and 7.8 percent rise in Victoria.

The rate of sales in motor vehicles implies that consumer spending would continue to expand at a modest rate and is in line with above average levels of business conditions, stated St George Economics.

“With low interest rates and confidence for businesses and consumers at close to average levels, a moderate pace of growth in motor vehicle sales is expected to continue”, added St George Economics.