Economy-wide spending growth remained firm for the third month in a row, with every state and territory across the country seeing a lift in sales, according to the latest Commonwealth Bank Business Sales Indicator (BSI).
Economy-wide spending grew in October by 0.6 per cent in trend terms, the same figure as the preceding three months, however, down from the 0.7-0.8 per cent increases seen earlier in the year from March-June. With growth in the latest month, economy-wide spending has now risen in every month back to mid-2011.
Annual growth of spending also remained steady at 7.5 per cent – similar to growth experienced for the past six months – remaining well above the decade-average of 5.1 per cent.
The more volatile seasonally adjusted measure of the BSI posted a 0.5 per cent gain in October, down from a strong 3.3 per cent increase in September, while annual seasonally adjusted growth eased from an 11-month high of 9.0 per cent to 7.4 per cent.
Craig James, Chief Economist, CommSec, said that businesses will be hoping for a lift in sales growth in November and December in the lead up to Christmas.
“With spending growth remaining solid in October, businesses will really be hoping that this continues over the coming months. Annual growth figures still show that economy-wide spending remains above the decade average, and this continues a long stretch of positive annual growth dating back to early 2012.
“Australian businesses have reasons for optimism ahead of Christmas given a lower Aussie dollar, declining unemployment, positive consumer sentiment and interest rates near generational lows,” James said.
At an industry level, notable winners included miscellaneous stores and mail order and telephone order providers (both up 1.1 per cent), as well as transportation and hotels and motels (both up 1.0 per cent). The large retail stores sector also grew by 0.8 per cent in October, after seeing similar growth for the past five months.
State by state analysis
Sales in October rose in trend terms in every state and territory across Australia. Tasmania again experienced the strongest growth, up 1.3 per cent, with Western Australia (up 0.6 per cent), NSW (up 0.5 per cent), South Australia, Victoria and the ACT (all up 0.3 per cent), Queensland (up by 0.2 per cent) and Northern Territory (up less than 0.1 per cent) also experiencing growth.
In annual terms, two states and territories had sales below a year ago: Northern Territory (down 6.9 per cent) and NSW (down 1.2 per cent). Annual growth was strongest in Tasmania (up 10.9 per cent) from South Australia (up 9.2 per cent), Western Australia (up 8.6 per cent), the ACT (up 8.3 per cent), Queensland (up 6.0 per cent) and Victoria (up 0.5 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.