By Aimee Chanthadavong

The strong growth of employment is set to boost retail spending in the coming years, Access Economics predicts in its August retail forecast.

The data has revealed that 350,000 additional jobs have been created over the past year.

“Key factors are job gains and employment, which will drive strong growth in sales due to increasing consumer income,” David Rumbens, Access Economics director told Retailbiz.

This has been particularly prominent in Victoria, New South Wales, South Australia and the ACT, which have all shown some retail gains on the back of job gains. Retail sales in Tasmania on the other, has fallen over the past year because the employment rate has not been as strong.

“There have been some good job gains and they were the areas that probably benefited the most with interest rates being low. Conversely, their [Tasmania] gains haven’t been good but the pattern is starting to change and we’re seeing better figures,” Rumbens said.

Overall, Rumbens said that data has shown the retail sector has enjoyed a more consistent period of sales with five consecutive months of retail sales growth, a run which was last achieved in December 2007.
“There’s always uncertainty, but what we’ve seen is that sales growth in the official ABS figures is that it will continue to grow over the next couple of years,” he said.

It has been predicted that retail sales will grow by 3.2 per cent in 2010-11 and will lift to 3.7 per cent in 2011-12 during the next peak in housing construction.

“One of things we’ve seen previously is the support of retail sales in house prices but we don’t expect that over the next couples of years as we’re unlikely to see a boom but rather a little to moderate growth,” Rumbens said.

“There’s reason to suggest that there won’t be a boom but retailers should be more optimistic than they certainly were last Christmas.”