Australian retailers are continuing to struggle, with sales sliding in April.

Key points: Retail sales fell in April with household goods and clothing and footwear the hardest hit

Retail sales fell in April with household goods and clothing and footwear the hardest hit Retail sales growth have been poor for more than a year, hit by low wages and worries about falling house prices

Retail sales growth have been poor for more than a year, hit by low wages and worries about falling house prices The export economy is booming with a record quarter helping to narrow the current account deficit to its lowest level in more than 20 years

Consumers struggling with low wage rises and concerns about job security have kept their wallets shut, with retail turnover falling 0.1 per cent over the month.

The result follows a fairly soft 0.3 per cent rise in March and was far worse than the consensus forecast of another modest rise.

Once again, the household goods sector suffered the brunt of the downturn.

Sales of household goods fell 0.9 per cent, while clothing footwear and accessories sales were down 1.2 per cent on a month ago.

Australians tended to eat at home more, with food sales up marginally, while there was a substantial decline in spending at cafes, restaurants and takeaway food outlets.

Department stores enjoyed a surprising rebound, fired up by a spate of discounting.

'Dismal' numbers

The retail retreat was felt acutely in New South Wales, where turnover was down 0.4 per cent in seasonally adjusted terms — its biggest drop in more than seven years.

Sales also slowed rapidly in Victoria, although picked up in Queensland and South Australia.

BIS Oxford economist Sarah Hunter described the retail figures as "dismal".

"Looking through recent volatility in the series, the trend pace of growth has been stuck at 0.2 per cent a month since August, which clearly highlights the fundamental challenges facing the sector from weak income growth and squeezed margins as a result of competition from online sales," Dr Hunter said.

"There are [also] signs that e-retailers are also being hampered by the challenging domestic conditions — the share of online sales in total spending has largely stagnated over the last twelve months, after previously growing rapidly."

Export boom rolls on

While the retail sector continues to be weighed down by a struggling domestic economy, a record quarter by exporters helped to drive Australia's current account deficit to the lowest level since 1996.

The net balance on goods and services was a $13.6 billion surplus, with exports up $4.2 billion and imports down $514 million.

However, the trade surplus was smaller than the $16 billion net income liability, leaving the current account with a quarterly deficit of $2.9 billion.

"We saw strong goods exports this quarter, with prices up sharply for metal ores and minerals and non-monetary gold," ABS chief economist Bruce Hockman said.

"Iron ore is a significant part of the story owing to domestic factors and broader global supply interruptions pushing prices up."

Net foreign debt edged up by another $5 billion over the quarter to $1.095 trillion.

GDP growth to slow

The stronger than expected net export result, coupled with surprises in public sector spending and business inventory build-up, have led some economists to nudge up GDP forecasts ahead of today's first quarter National Accounts release.

Capital Economics has raised its forecast for first quarter GPD growth to 0.5 per cent.

"That would be higher than the 0.2 per cent quarter-on-quarter gain in Q4, but still consistent with annual GDP growth slowing below 2 per cent [annually]," Capital Economics' Ben Udy said.

"Overall, [Tuesday's] data suggests that economic activity remained subdued in the first half of 2019, placing increasing pressure on the RBA to cut interest rates to stimulate the economy."

However, ANZ's Felicity Emmett was sticking to a more downbeat forecast of GDP growth at 1.7 per cent — the slowest pace since 2009 in the depths of the GFC.

"The main new pieces of information since our preliminary forecast last week are weaker profits for both large and small businesses, and slightly weaker net exports," Ms Emmett said.

"Strong growth in inventories provided some offset to the weakness elsewhere. Government spending and wages were broadly in line with our forecasts.

"In [today's] report, the focus will once again be on the household indicators — consumption and income. Weak retail sales volumes point to relatively modest growth in consumer spending.

"While retail spending accounts for only around 30 per cent of consumption, falling house prices and ongoing soft income growth will have weighed on consumer spending in the quarter."