By Aimee Chanthadavong
Economy-wide spending in September fell for the first time in 13 months, according to the latest Commonwealth Bank Business Sales Indicator (BSI), which tracks the value of credit and debit card transactions processed through the bank’s point-of-sale terminals.
The BSI showed spending edged 0.1 per cent lower in trend terms in September, after rising by 0.1 per cent in August and 0.2 per cent in July. While this is the first time in 13 months spending has fallen, September was the fifth month in a row where the rate of spending growth has slowed.
The seasonally-adjusted measure of sales showed a more volatile decrease of 1.4 per cent in September after posting a 2.5 per cent rise in August. In annual terms, the spending growth rate eased from 12.0 per cent to 5.3 per cent.
According to Commonwealth Bank local business banking executive general manager Adam Bennett, it’s not yet clear whether the figures indicate a new slowdown in spending or simply a temporary pause after more than a year of growth.
“The latest spending data shows the fifth decline in the pace of sales growth after spending posted a solid 1.1 per cent gain in April,” he said.
“The question is whether this slowdown in spending is a pause for breath or something entirely different.
Despite the month-on-month decline, annual spending growth remains strong, with sales increasing 7.5 per cent in trend terms over the year to September, down from 7.8 per cent in August.
In correlation to this, 12 out of the 19 industry sectors saw sales rise. The amusement and entertainment sector continued to enjoy another month of strong growth with sales up 3.9 per cent in trend terms, following a 5.4 per cent jump in August and a 6.9 per cent increase in July.
Automobiles and vehicles also performed well, up 1.2 per cent, while wholesale distributors and manufacturers increased sales by 1 per cent.
Only seven industries recorded lower sales in trend terms, including retail stores, which fell by 0.9 per cent.
Craig James, chief economist at the bank’s broking subsidiary CommSec and author of the BSI, said improving economic conditions pointed to a period of stronger spending ahead.
“The improvement in consumer confidence following the Federal election should get a further boost from the latest employment data, which shows unemployment has fallen to 5.6 per cent in September, down from 5.8 per cent in August,” he said.
“Property prices in a number of capital cities have also made solid gains in recent months, potentially boosting confidence about personal finances and, in turn, spending. Interest rates are likely to remain at record low levels in the near term, so this should all contribute to healthy spending in the future.”