The retail industry has been able to enjoy a brief upswing in the June quarter, according to the latest AFGC CHEP Retail Index.

The Index recording a 3.3 per cent increase in overall retail activity but it’s predicted this will only last briefly.

On a monthly comparison, the Index predicts retail trade was 3.5 per cent higher in June 2012 compared with June 2011, with a turnover of $21.3 billion but growth is expected to slip to 3.2 per cent in August 2012 with a predicted retail trade turnover figure of $21.4 billion. Growth in nominal retail trade has picked up slightly since January 2012.

According to the AFGC, the factors that influenced the increase in spending include a series of Reserve Bank of Australia interest rate cuts since 2011 and recent Federal Government Family Assistance Package payments.

The Index predicts growth will pick up in the September quarter compared with the 2011 September quarter, but will remain moderate at 3.2 per cent.

AFGC’s acting chief executive Geoffrey Annison said consumer sentiment remained weak and broad retail conditions soft.

“Continued flagging economic conditions in Europe and a weakness in house prices and the share-market are weighing on consumer confidence,” Annison said.

“It is also important to note that retail conditions vary dramatically from state to state, with mining states experiencing healthy retail spending growth and states where mining makes a smaller contribution to the economy battling much weaker retail conditions.”

Australian Bureau of Statistics figures show that in Western Australia, nominal retail spending growth has been trending at almost 10 per cent over the past year while Queensland and the Northern Territory have been experiencing growth of 4 per cent to 5 per cent.

Retail conditions are much weaker in New South Wales and South Australia, with growth of about 2 per cent over the past year, and in Victoria and Tasmania, where growth was less than 1 per cent over the same period.

CHEP Australia & New Zealand president Phillip Austin said conditions were stabilising and that the ongoing subdued nature of retail conditions was driving a greater level of collaboration between retailers, suppliers and service providers.

“The data supports a view that recent activity has stabilised and it is now in fact indicating an underlying resilience,” Mr Austin said. “In recent times we’ve seen an increase in collaborative innovation to continue to achieve efficiency benefits in a low-growth environment.”