* Retail sales rise 0.2 pct in Feb, 10th straight month of
* Trade surplus tops forecasts at A$1.2 bln, exports to
* Q1 shaping up to be a brisk quarter for economic growth
By Wayne Cole
SYDNEY, April 3 Australian retail sales rose for
the 10th straight month in February, government data showed,
while the country boasted another sizable trade surplus as
exports to China grew by almost a third compared to last year.
Thursday's data showed the economy was on track for a solid
quarter of growth as low rates and rising household wealth
boosted spending, while a decade of furious mining investment
fuelled resource exports.
"The outlook for the trade balance has been well documented:
persistent surpluses as mining production picks up and
investment slows, said Michael Turner, a strategist at RBC
Retail sales rose 0.2 percent in February to a record
A$22.97 billion ($21.2 billion), a resilient performance given
it followed a 1.2 percent surge in January. It was also the 10th
straight month of increases, the longest such stretch since
The revival in sales is important as the A$270 billion
retail sector accounts for 17 percent of Australia's A$1.5
trillion in annual gross domestic product (GDP) and is the
second-biggest employer, providing 10 percent of all jobs.
Sales of household goods showed particular strength with
gains of 2.0 percent in February and 1.8 percent the month
before. That could be just an early sign of what is to come as a
boom in home building stokes demand for homewares, furniture and
That virtuous cycle is exactly what the Reserve Bank of
Australia (RBA) aimed to achieve when it cut interest rates a
record low of 2.5 percent last year, and one reason it no longer
sees a need to ease further.
At its April policy meeting this week the central bank said
rates were likely to stay on hold for some time. Futures markets
have priced out virtually any chance of a further cut <0#YIB:>
and have a first hike pencilled in for early next year.
RBA Governor Glenn Stevens will have his own chance to react
to the news when he gives a speech in Brisbane at 0250 GMT.
The central bank has also been optimistic that the massive
investment on mining expansion will continue to lift export
volumes and so support economic growth.
The effects were evident in monthly trade figures which
showed the country ran a surplus of A$1.2 billion in February,
topping analyst forecasts for $850 million.
Exports of fuels, mainly liquefied natural gas, rose a sharp
9 percent in the month and are set to surge over the next few
years as major projects come on stream.
China remained the by far the biggest buyer of Australian
goods with exports to the Asian giant up 32 percent on February
last year at A$8.2 billion.
That will in turn help fill the hole left as mining
investment cools. Net exports added 0.5 percentage points to GDP
in the last quarter of 2013, and no less than 2.4 percentage
points for all that year.
Imports were also up in February, mainly due to a 15 percent
jump in capital goods, which hints at a possible improvement in
business investment for the quarter.
(Editing by Eric Meijer)