Spending grew by 0.3 per cent in December in trend terms, after lifting by 0.4 per cent in November and 0.5 per cent in October. This result continues the uninterrupted trend of economy-wide spending growth each month dating back to mid-2011.
Annual growth of spending also held strong at 7.2 per cent for the fourth consecutive month, showing spending across the economy in the lead up to Christmas was well up on the previous year. This result remains well above the decade-average of 5.1 per cent growth.
The more volatile seasonally adjusted measure of the BSI rose by 0.7 per cent in December, after posting a decline 0.9 per cent in November, while annual seasonally adjusted growth lifted from 6.1 per cent to 7.3 per cent.
Craig James, Chief Economist, CommSec, said that while growth may have slowed, positive signs remain for the year ahead.
“Businesses should be happy with the healthy growth in December. While it wasn’t an ‘out of the ball-park’ result, spending over the Christmas period was up on the year before and continues a long period of spending growth.
“While we saw growth in the retail sector, many sectors across the economy are also posting healthy growth. With spending growth remaining above inflation, positive signs remain for business in 2016,” Mr James said.
The Business Services sector, which includes business products such as office equipment and computer software, posted the strongest result, with spending up by 3.5 per cent. This is the tenth consecutive month of spending growth in the sector, showing businesses are continuing to build confidence.
The Retail Stores sector continued to grow, up 0.4 per cent, however down from growth rates of 0.7-0.8 per cent recorded from May to September. Other notable sectors to experience growth include Hotels/Motels and Government Services, which both rose by 1.8 per cent in December.
At the other end of the scale, eight of the 19 industry sectors fell in trend terms in December including Airlines, Professional Services and Membership Organisations and Amusement & Entertainment.
Sales rose in all but one of the states and territories in December, with Northern Territory posting the strongest growth (up 1.4 per cent), followed by Victoria and ACT, (both up 1.1 per cent), Tasmania and Western Australia (both up 0.8 per cent), NSW (up 0.7 per cent) and Queensland (up by 0.3 per cent). South Australia was the only state or territory to experience a decline in sales, down 0.5 per cent.
Every state and territory however had a positive result in annual terms, with all posting sales above a year ago. Strongest growth was in Tasmania (up 11.8 per cent) followed by ACT (up 10.3 per cent), Western Australia (up 9.2 per cent), Queensland (up 6.8 per cent), South Australia (up 6.5 per cent), Victoria (up 6.0 per cent), NSW (up 3.5 per cent) and Northern Territory (up 0.9 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.
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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.