Consumer spending slides
The Commonwealth Bank’s Business Sales Indicator (BSI) has shown that consumers are returning to their conservative ways in the absence of further stimulus measures.
The BSI, which measures the economy-wide spending by tracking the value of credit and debit card transactions, dropped 5.4 per cent in the July period, following a 3.1 per cent gain in June.
Commonwealth Bank’s Acting Execive General Manager for Local Business Banking said the latest figures were a disappointing result for the country’s businesses, which had been buoyed on increased spending in the prior months.
“It’s definitely a blow to businesses which, in the past couple of months in particular, had been the beneficiaries of greater levels of consumer spending thanks to a number of positive economic announcements,” said Mr McGrath.
Despite the slump, spending remains up 4.7 per cent on one year ago in seasonally adjusted terms.
Five of the industry sectors fell in July in trend terms, a similar result to June. The strongest monthly trend increase in sales occurred in Mail Order & Telephone Order Providers (up 3.5 per cent), Service Providers (up by 3.3 per cent) and Wholesale Distributors and Manufacturers (up by 1.7 per cent). Amongst the weakest sectors in July were Automobile & Vehicles (down 0.7 per cent), Transportation (down 0.6 per cent) and Personal Service Providers (down by 0.2 per cent).
In annual terms, two of the 20 industry sectors contracted in July, a similar result to both May and June. The weakest sector was Airlines and Hotels & Motels whilst at the other end of the scale, spending was strongest at Wholesale Distributors and Manufacturers (up by 27.1 per cent), Mail Order & Telephone Order Providers (up 25.8 per cent), Service Providers (up by 24.5 per cent).
Victoria and New South Wales posted the worst results in the country, with sales in Victoria falling by 0.2 per cent and 0.1 per cent in New South Wales. The strongest results were in South Australia and the ACT, both of who recorded a 0.8 per cent bump.