Despite the recent bounce in crude oil prices, the collapse in prices last autumn is still rippling through the retail environment this year through a slowdown in household income and a lower average price at the pumps. According to TD Economics, retail sales growth is expected to slow from 4.6% last year to 2.9% this year. As oil prices continue to grind higher into 2016, retail sales are expected to advance by a more normal 3.6% next year.TD Economics forecasts gasoline prices are likely to average $1.09/L in 2015 and $1.20/L in 2016 compared with $1.28/L in 2014. Due to this volatility in prices, gasoline stations are expected to record large sales swings which will drag down the overall retail sales performance this year and provide a boost the year after. As such, judging the overall sales performance from the headline retail sales growth rate will provide a misleading snapshot.
The material has been provided by InstaForex Company – www.instaforex.com