New statistics show a 1.8% fall in retail turnover for June 2021, but one expert says "the worst is yet to come".
The June quarter was positive overall, up 0.8%, according to Australian Bureau of Statistics (ABS) data.
This increase follows the 0.5% fall seen in March 2021.
However, there was a 1.8% fall in the month of June, with spending heavily impacted by lockdowns across the country.
Callam Pickering, Indeed's Asia-Pacific economist, says the hard lockdowns in Victoria and New South Wales will "hamper the retail sector in the near-term", and could eventually see an "outright fall" in economic activity.
"Fiscal support will support retail spending but these measures aren’t JobKeeper. And we shouldn’t expect the same level of stimulus that occurred last year," Mr Pickering said.
Mr Pickering forecast steeper falls in the September quarter, saying extended lockdowns will "wreak havoc" on the economy.
Many economists have already predicted a contraction for the September quarter Gross Domestic Product (GDP), attributed to the ongoing COVID lockdowns.
Additionally, Prime Minister Scott Morrison previously warned of an incoming "heavy blow" to the economy, but said that the economy will bounce back once lockdowns end.
Industries and states heavily impacted by lockdowns
ABS data showed the largest falls in retail spending across a few categories.
Clothing, footwear, and personal accessory retail fell 9.5% in June 2021, and department stores saw a decline of 7%.
Cafes, restaurants, and takeaway food services dropped 6%. Other retailing dipped 1.6%, and household goods retailing also fell by 1.3%.
Food retailing is the only industry to see a rise in spending by 1.5%, attributed by ABS to restrictions on eating out forcing people to eat at home instead.
Additionally, information revealed which states saw the steepest declines in spending.
Victoria saw the largest fall, down 4%, followed by New South Wales declining by 2%.
"There is good reason to expect both states to fall further in July, with the weakness in New South Wales persisting into August," Mr Pickering said.
Queensland saw a slight decline in spending, down 0.9%, with the data reflecting the sunshine state's four-day lockdown in late June. This decline is without consideration of its latest eight-day lockdown.
Western Australia and Northern Territory also had stay-at-home orders for at least one day of the month in June, and saw a 0.1% rise and 1.8% fall respectively.
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