Consumer spending continues rally
Consumer spending has recorded its seven straight month of growth, posting a healthy 0.4 per cent increase in March according to the Commonwealth Bank’s latest Business Sales Indicator (BSI).
The BSI tracks the total value of credit and debit card transactions passing through the Commonwealth Bank’s point-of-sale terminals.
According to this month’s BSI, spending increased at a relatively slower pace across March, lifting by 0.4 per cent trend terms following a 0.7 per cent increase in February. This is the smallest gain recorded by the BSI over the past six months.
According to Adam Bennett, Executive General Manager, Local Business Banking, Commonwealth Bank, despite the modest slowdown in the growth rate in March, the continued upward trajectory in spending patterns paint an encouraging picture for businesses across the country.
“Although March saw the smallest gain in spending in six months, consumers are continuing to open their wallets and this should be taken as a positive sign for businesses. Consumer spending has increased for seven straight months now and businesses should take this a strong indication that consumers are willing to spend on a consistent basis.
“That said, not all industry sectors experienced sales growth in March. Whilst Service Providers and Professional Services performed well last month, Mail Order/Telephone Order Providers and Business Services experienced a drop in sales,” said Mr Bennett.
Craig James, Chief Economist of the Bank’s broking subsidiary CommSec and author of the BSI, believes the latest results show consumer confidence is starting to gain momentum.
“As March marks the seventh consecutive monthly increase in spending, we’re starting to see that consumers are becoming more confident and responding with increased spending. This is largely reflective of an overall positive outlook for the economy, which was reflected in the Reserve Bank’s decision to hold the cash rate steady in both March and April.