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Media Release

Lacklustre spending across the economy

Lacklustre spending across the economy

Tourism sector performs strongly as spending growth slows across Australia.

Spending across the local economy was flat in April, according to the latest Business Sales Indicator (BSI) released by the Commonwealth Bank today.

The report, a key monthly indicator of the state of the national and state economies, showed that spending overall was broadly unchanged in April after a revised 0.1 per cent gain in March but grew solidly in some sectors and states.

CommSec Chief Economist Craig James said: “Over the past couple of months spending growth has slowed, potentially due to uncertainty of the Federal Budget as well as slower wage growth.

“The timing of Easter and school holidays may have affected spending levels and a clearer picture of economy-wide spending should emerge over the next couple of months.”

Annual trend growth in sales slowed from 5.9 per cent to a four-month low of 5.8 per cent in April.

Local tourism is performing strongly with the Hotel and Motel sector seeing some of the strongest gains in April and leading all sectors on annual growth. Strong performances were also seen in the ‘experience economy’, with the Amusement and Entertainment sector the strongest performer in the April results.

“Domestic tourism is doing increasingly well, the Aussie dollar has come down and people are taking short breaks or enjoying weekends away. We’ve also observed consumers for some months are spending more on experiences rather than goods like clothing and shoes,” said James.

The BSI tracks the value of credit and debit card transactions processed through Commonwealth Bank point-of-sale terminals. The BSI covers spending broadly across the economy rather than just retail sales, including spending on automobiles, personal services and airlines.

Sector analysis

Twelve of the 19 industry sectors rose in trend terms in April.

The strongest gains in sales occurred in Amusement & Entertainment (up 2.0 per cent), Miscellaneous Stores (up 0.9 per cent), Hotels & Motels (up 0.8 per cent) and Service Providers (up 0.6 per cent). The biggest drops in sales occurred at Government Services (down 1.8 per cent) and Business Services (down 0.6 per cent).

In annual terms, sectors that saw the strongest gains include Hotels & Motels (up 15.3 per cent), followed by Service Providers (up 14.4 per cent) and Automobiles & Vehicles (up 13.8 per cent).

State by state breakdown

Spending has consistently increased in Western Australia for 71 months, for 69 months in South Australia and for 63 months in Tasmania.

In April, sales were strongest in the Northern Territory (up 0.9 per cent), Tasmania (up 0.7 per cent), Western Australia (up 0.5 per cent), Victoria (up 0.4 per cent), South Australia (up 0.3 per cent), Queensland (up 0.1 per cent), and ACT (up 0.1 per cent). New South Wales fell by 0.3 per cent.

In annual terms, all states and territories had sales above a year ago. Strongest growth was Tasmania (up 8.1 per cent), from Western Australia and the Australian Capital Territory (both up 7.9 per cent), South Australia (up 7.8 per cent), Queensland (up 6.5 per cent), Northern Territory (up 5.0 per cent), New South Wales (up 4.3 per cent), and Victoria (up 4.2 per cent).