September showed the first back-to-back gains for the Commonwealth Bank Business Sales Indicator (BSI) in ten months, a promising sign for retailers.
While the Commonwealth Bank Business Sales Indicator for September is still down 3 percent on the same time last year, September’s BSI, which tracks the value of credit and debit card transactions processed through Commonwealth Bank point-of-sale terminals, rose by 0.2 percent in trend terms, the second consecutive monthly gain following eight months of decline.
According to Bernard Tanner, Chief Operating Officer Local Business Banking, Commonwealth Bank, the recent recovery in consumer spending is a welcome sign for retailers.
“The latest figures show that strong market fundamentals are driving continued improvement in spending, and that’s good news for businesses. More people are back doing business again following the economic downturn and growth generally looks robust across the states and most industry sectors.
“However, while confidence is broadly increasing, it’s still early days. Despite the last two months of improvement, spending is still well down on where it was a year ago. Consumers are still cautious and continued growth is likely to rely on stability from the Reserve Bank”, said Mr Tanner.
Craig James, Chief Economist of the Bank’s broking subsidiary CommSec and author of the BSI, said the latest spending figures point to some positive signs but he warns there’s still a way to go.
“This is the best news that businesses have had in a long while, especially those dependent on consumer spending. It seems the purse springs are being loosened but we would caution that the runs aren’t on the board as yet. However if the Reserve Bank stays on the interest rates sidelines people will be confident to spend again, especially with the Aussie dollar rising and the job market still strong,” said Mr James.
