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Annual sales growth remained above the decade average in August, despite experiencing the slowest monthly growth in almost three years, according to the latest Commonwealth Bank Business Sales Indicator (BSI).
Economy-wide spending lifted 0.2 per cent in trend terms in August after growth of 0.4 per cent in July and 0.5 per cent in June. Annual growth of spending eased for the third month to 6.6 per cent, still above the decade-average of 5.1 per cent.
The more volatile seasonally adjusted measure of the BSI fell 1.0 per cent in August – the second fall in six months – while annual growth eased from 7.3 per cent to 5.6 per cent.
Craig James, Chief Economist, CommSec and author of the BSI report, said despite the mild sales growth recorded in August, the Australian economy is still in good shape and continuing to grow.
“While the initial boost in business spending following the last Federal budget has tapered off, annual growth figures show that economy-wide spending remains above the decade average. Interest rates are low, the job market shows signs of settling and home building is underpinning spending across the economy.
“Additionally, Australian businesses have reasons for optimism given a lower Aussie dollar and budget stimulus measures for the small business sector,” Mr James said.
At an industry level, sectors to experience the strongest growth were Clothing and Miscellaneous Stores, both rising 1.1 per cent in trend terms respectively in August. Professional Services and Membership Organisations and Transport also grew (both up 0.7 per cent).
At the other end of the scale, sectors to experience a decline in sales in trend terms included Airlines (down 4.4 per cent) and Mail Order/Telephone Order providers (down 3.5 per cent). Business Services also contracted in August, falling 0.5 per cent – the largest decline since February this year.
In annual terms, six of the 19 industry sectors contracted in August including: Utilities; Mail Order/Telephone Order Providers; Automobile and Vehicle Sales and Business Services. Meanwhile, sectors to record strongest growth were: Hotels & Motels; Miscellaneous Stores; Personal Service Providers; Clothing Stores and Wholesale Distributors/Manufacturers.
STATE BY STATE ANALYSIS
Sales rose in all states and territories in August except the Northern Territory (down 0.5 per cent) and Victoria (down 0.1 per cent). Tasmania recorded the highest growth (up 0.8 per cent), followed by South Australia (up 0.7 per cent), Western Australia (up 0.5 per cent), Queensland (up 0.4 per cent) and the Australian Capital Territory (up 0.1 per cent), while New South Wales recorded flat sales.
In annual terms, the Australian Capital Territory recorded the strongest growth (up 12.3 per cent), followed by South Australia (up 8.3 per cent), Western Australia (up 7.8 per cent), Tasmania (up 7.7 per cent) and Queensland (up 6.7 per cent).
Three states and territories recorded sales figures below the previous year:. Northern Territory (down 7.9 per cent), New South Wales (down 5.9 per cent) and Victoria (down 0.2 per cent).
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.
Find out more about the latest Commonwealth Bank Business Sales Indicator
About the Commonwealth Bank Business Sales Indicator