Retail sales are expected to drop in the ACT. Photo: Jessica Shapiro
Retail sales in the ACT are forecast to slow due to federal government spending cuts and less house building.
The outlook for the territory's sector during the next year is therefore fairly modest, according to a report to be released on Wednesday.
Deloitte Access Economics says retail sales in the ACT fell in the December quarter but have been surprisingly strong during the past year.
"The expected fiscal contraction by the federal government has proven to be somewhat less of a short-term challenge, especially now that the federal government has decided to hasten slowly on its way back to surplus," Deloitte partner David Rumbens said.
"At the same time, the RBA's rate cuts have freed up the spending by Canberra's mortgage belt.
"However, there is a slowdown in the offing, as growth will be held back by the impact of this year's stepped-up efficiency dividend on federal departments, and by a developing downswing in the pace of housing construction."
The Canberra-based economic forecasting company says 2012 was a disappointing year for Australian retailers, after showing a lot of promise.
"Retail sales growth was strong in the first half of the year but momentum tailed off in the second half and many retailers continue to struggle in a highly competitive environment," Mr Rumbens said.
The country's better-performing sectors last year were food, cafes and restaurants.
"Those on the wrong side of the dividing line were the usual suspects of late – household goods retailers, clothing retailers and department stores," he said.
"The underlying economic story in Australia is currently not as strong as it has been in recent years.
"Across the country retailers continue to face mixed fortunes.
"Retail sales have seen solid growth in Queensland despite a patchy economy and in the ACT, defying federal government restraint."
