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Economy-wide spending finished strongly in 2013, with December recording a 0.9 per cent rise in sales according to the latest Commonwealth Bank Business Sales Indicator (BSI). This was the 16th straight month of spending growth, and in annual terms, the BSI rose 9.8 per cent in December, the fastest growth rate in more than six years.
The BSI is a key measure of economy-wide spending, tracking the value of credit and debit card transactions processed through Commonwealth Bank point-of-sale terminals.
The seasonally-adjusted measure of sales also continued this positive trend, rising by 0.4 per cent in December after a 0.2 per cent lift in November and a 4.0 per cent rise in October. This is the first time spending has grown for three consecutive months since the first quarter of 2013. The seasonally-adjusted annual growth rate rose from 9.4 per cent in November to 10.6 per cent in December.
Lex Thornton, General Manager Local Business Banking, Commonwealth Bank, said, “Economy-wide spending has grown at a healthy, sustainable pace in December, adding to the continual rise in spending over the past 16 months. These latest figures build on what was a strong year across most states and industries.
“Businesses will no doubt be looking for the upward spending trend witnessed throughout the past year to continue in 2014. Regardless of this positive trend, cash flow management and efficient business practices should remain a priority,” said Mr Thornton.
Savanth Sebastian, Economist CommSec, said, “The spending increase in 2013 has provided a strong foundation for further increases in 2014. We are seeing the housing recovery continue to gather momentum, while rising wealth levels, low interest rates and a recovering share market is supporting consumer confidence and in turn spending.
“The lower Australian dollar should also provide a boost to exports in coming months and help to alleviate the risks surrounding the rebalancing of the economy. Dually, improving prospects for a broader global economic recovery are in part supporting a more positive outlook for consumer sentiment,” said Mr Sebastian.
Retail sharply increases, while Transport continues to expand
In trend terms, 16 of the 19 industry sectors witnessed spending growth in December, up from 15 in November. The Retail sector experienced a 1.1 per cent increase over the Christmas period, up from a 0.2 per cent rise in November. The Transport industry has recorded the largest rise each month over the past four months, leading to a rise of 3.4 per cent in December. The Hotels & Motels and Utilities industries also performed well in December, with an uplift of 1.8 per cent and 1.6 per cent respectively.
Spending levels were weakest amongst Mail Order/Telephone Order Providers recording a fall of -2.1 per cent, followed by Professional Services & Membership Organisations experiencing a -1.0 per cent decrease and Repair Services falling -0.1 per cent.
In annual terms, the Amusement & Entertainment industry experienced the greatest lift in spending, rising 44.5 per cent.
STATE AND TERRITORY ANALYSIS
South Australia remains on top
Sales were firmer across the country, with seven of the states and territories recording stronger sales in trend terms in December. South Australia experienced the largest spending increase, up 1.7 per cent, followed by Western Australia (up by 1.2 per cent), New South Wales (up 1.0 per cent), Victoria (up 0.9 per cent), Northern Territory (up 0.8 per cent), Queensland and Tasmania (both up 0.3 per cent).
The Australian Capital Territory experienced its fourth month of negative sales growth, with spending falling 1.3 per cent in December.
In annual terms, no state or territory recorded sales growth below that of a year ago, with South Australia, Northern Territory, New South Wales and Tasmania leading the way ahead of Western Australia, Victoria and Queensland.
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About the Commonwealth Bank Business Sales Indicator