NATIONWIDE CONSUMER SPENDING REMAINS HEALTHY IN APRIL
- Economy-wide spending rose by 0.4 per cent in April.
- Annual sales growth stands at 6.4 per cent, well above the decade average.
- Sales rose in all the states and territories, except Northern Territory.
Nationwide consumer spending grew at a healthy rate in April according to the Commonwealth Bank’s latest Business Sales Indicator (BSI). Sales grew by 0.4 per cent in trend terms in April, following gains of 0.5 per cent in February and March, and annual growth is well above the 5.5 per cent long-term trend rate at 6.4 per cent.
The seasonally adjusted estimate of spending rose by 1.4 per cent in April after a 1.6 per cent lift in March, the strongest back-to-back gain in almost two years.
“The good news for businesses is that people are out there spending. With new tax breaks for small businesses announced in the Federal Budget, there’s now a fantastic opportunity for business owners and leaders to capitalise on that mood by investing back in their business,” said Ms Claire Roberts, Executive General Manager, Local Business Banking, Commonwealth Bank.
“Businesses should get a solid strategy in place to make the most of consumer optimism, carefully considering the merit of any purchases they might want to make using the new tax break,” said Ms Roberts.
Craig James, Chief Economist at the Bank’s broking subsidiary CommSec and author of the BSI report, said economic conditions were favourable for sales growth to continue in the coming months.
“Continued strength in the housing market and the recent rate cut have given consumers the confidence to spend, as the latest BSI indicates. We can expect sales growth to continue at a healthy rate throughout 2015, as measures from the recent Federal Budget trigger a surge in business investment and the global economic outlook improves,” said Mr James.
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.
Across the different industry sectors spending fell in just four of the 19 sectors in April. Contractions were seen in Business Services (down by 0.4 per cent); Automobile & Vehicle Sales (down by 1.1 per cent); Airlines (down 1.0 per cent); and Mail Order/Telephone Order Providers (down by 2.7 per cent).
Among the strongest industry sectors in April were Amusement & Entertainment (up 2.4 per cent); Professional Services & Membership Organisations (up by 1.3 per cent); and Miscellaneous Stores (up 1.1 per cent).
State by state analysis
Sales rose across all the states and territories in April, with the exception of Northern Territory (down 0.8 per cent). Sales rose most in South Australia and the ACT (both up by 0.9 per cent), followed by Western Australia. Victoria and Queensland (all up 0.5 per cent), NSW (up 0.3 per cent) and Tasmania (up 0.1 per cent).
Find out more about the latest Commonwealth Bank Business Sales Indicator.
About the Commonwealth Bank Business Sales Indicator
- The Commonwealth Bank Business Sales Indicator (BSI) is calculated by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities throughout Australia.
- The BSI has been devised to provide a monthly assessment of spending trends in the Australian economy (covering 19 industry sectors and all Australian states and territories) and is available to the public on the Bank’s website and to the media on or around the 20th day of each month.
- Credit and debit card transactions can be volatile on a month-to-month basis, affected by seasonal and irregular factors. The BSI is tracked in seasonally adjusted and trend terms. The overall BSI is measured in both seasonally adjusted and trend terms while state/territory and industry data are measured using the less volatile ‘trend’ approach. The seasonally adjusted and trend estimates of the BSI results are derived via the SEASABS statistical program from the Australian Bureau of Statistics.
- The monthly BSI has been devised to provide a more timely assessment of spending trends in the economy. The main monthly indicator of spending in the economy is the Australian Bureau of Statistics’ (ABS) Retail Trade release. However these statistics only cover spending at retail establishments, and exclude spending at a raft of other businesses.
- The BSI includes transactions made at traditional retail establishments such as supermarkets, clothing stores, cafes and restaurants and as such is more comparable to the ABS Household Final Consumption Expenditure, which is released on a quarterly basis. The BSI also covers businesses such as airlines, car dealers and utilities, such as water and electricity companies, as well as motels, business, professional and government services and wholesalers.
- The BSI includes industry sectors based on the International Merchant Category Code (IMCC) categories. MCC is a four-digit number assigned to a business when the business first starts accepting cards as a form of payment.
For further media enquiries, please contact:
Commonwealth Bank Media Relations
Ph: 02 9118 6919