Economy-wide spending enjoyed a solid gain in June, according to the latest Commonwealth Bank Business Sales Indicator (BSI), suggesting consumers are slowly becoming less tentative about parting with their cash.
In seasonally adjusted terms spending is now up 10.1 percent on a year ago – the biggest annual gain in over four years.
The BSI tracks the value of credit and debit card transactions processed through Commonwealth Bank point-of-sale terminals, which represent around 30 percent of the Australian market.
The BSI has now recorded six rises in sales over the past eight months, with spending up 2.1 percent in May.
The strongest monthly trend increase in sales occurred in the Service Providers sector (up 8.1 percent), followed by Business Services (up 3.1 percent), Wholesale Distributors & Manufacturers sector (2.9 percent), Mail Order & Telephone Order Providers (2.8 percent), and Contracted Services (1.1 percent).
No state or territory recorded weaker sales in trend terms in June. The ACT enjoyed the strongest result (up 2.1 percent), followed by South Australia and Western Australia (up 1.2 percent), Queensland (up 0.9 percent), Northern Territory (up 0.7 percent), Victoria (up 0.6 percent), NSW (up 0.5 percent), and Tasmania (up 0.1 percent).
Local businesses should welcome these positive results, according to Commonwealth Bank executive general manager of local business banking Matt Comyn.
“We know the patchy nature of the economy means businesses are continuing to be conservative. However, what these results tell us is that consumers are taking tentative steps in the right direction.
Small surges in consumer sentiment can result in spending increases, he said, which is reflected in six rises over eight months.
“While these improvements are gaining traction, consumer confidence still remains fragile. This, coupled with a competitive landscape, means businesses should remain focused on moving forward,” he added.
