Economy-wide spending in February remained unchanged from the previous month, indicating a clear slowdown in spending according to the latest Commonwealth Bank Business Sales Indicator (BSI).
Spending was flat in trend terms in February (0.0 per cent growth), matching the result from January. This shows a progressive slowing in growth since September 2015 when spending grew by 0.6 per cent, followed by growth of 0.5 per cent in October, 0.3 per cent in November and 0.1 per cent in December.
However, while annual growth of spending also eased from 6.3 per cent to 5.6 per cent in February, this current annualised result remains well above the decade-average of 4.8 per cent growth. Six of the eight states and territories had slight increases in monthly sales, however the national score was weighed down by two states (Victoria and Queensland).
Craig James, Chief Economist, CommSec, said that the result represents a softening of the strong spending growth for much of 2015.
“Spending has been largely flat so far in 2016, indicating a bit of a pullback in growth from previous months. This softening of spending growth may be due in part to some concerns around the volatility in global financial markets since the beginning of the year.
“However, consumer confidence remains high and interest rates remain at record lows indicating an increase in spending may not be too far away,” Mr James said.
The more volatile seasonally adjusted measure of the BSI fell by 1.7 per cent in February, after rising by 1.1 per cent the previous two months, while annual seasonally adjusted growth also fell from 7.4 per cent to 5.0 per cent.
Spending growth slowed in most sectors in February, with the exception of Clothing Stores which lifted 0.3 per cent after falling the previous two months.
Of the sectors experiencing gains, notable was Government Services, up 1.9 per cent, the sixth consecutive month of growth. Sales at Automobile & Vehicle Rentals rose for the 14th straight month, up by 0.6 per cent.
At the other end of the scale, seven of the 19 industry sectors fell in trend terms in February: Airlines, Automobiles & Vehicles, Amusement & Entertainment, Business Services, Mail Order/Telephone Order Providers, Retail Stores and Transportation.
Sales rose in six of the eight states and territories in February, with ACT posting the strongest growth (up 1.2 per cent), followed by the Northern Territory (up 1.0 per cent), NSW (up 0.7 per cent), Tasmania and Western Australia (both up 0.2 per cent) and South Australia (up 0.1 per cent). Sales fell in Victoria (down 1.1 per cent) and Queensland (down 0.02 per cent).
In annual terms, every state and territory posted sales above a year ago. Strongest growth was in ACT (up 11.4 per cent) from Tasmania (up 11.3 per cent), Western Australia (up 9.1 per cent), NSW (up 7.2 per cent), Northern Territory (up 6.4 per cent), South Australia (up 6.1 per cent), Queensland (up 5.7 per cent) and Victoria (up 2.3 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.
About the Commonwealth Bank Business Sales Indicator