| Home Page : Archive News : June 2012 News : Hope returns for businesses as consumer spending lifts | |
Hope returns for businesses as consumer spending lifts | |
|
June 20, 2012 Hopes for an ongoing lift in spending across Australia have returned, following a 1.9 per cent increase in seasonally adjusted terms in May, according to the Commonwealth Bank Business Sales Indicator (BSI). This is the third increase in sales in the past four months, with spending now up 5.9 per cent on a year ago – the biggest annual gain in over two years. 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, a sample of approximately 30 per cent of the Australian market. Despite the stronger seasonally adjusted performance, in trend terms the BSI increased for the 10th consecutive month in May, however by only 0.3 per cent, the slowest growth rate since September 2011. According to Matt Comyn, Executive General Manager, Local Business Banking, Commonwealth Bank, although Australian consumer sentiment remains unsteady, the results for the year so far have been encouraging. “The momentum we have experienced this year demonstrates that small increases in confidence can translate to consumers’ willingness to spend. The May results factor in the RBA’s larger-than-expected decision to lower the cash rate for the first time in 2012 and that has clearly had an effect on the amount of money being spent at businesses across the country,” said Mr Comyn. “The results recorded in May are therefore promising for Aussie businesses – particularly based on other positive news for the economy this month – and point towards what is hoped to be continued growth in consumer spending. However, the overall story hasn’t changed and despite stronger fundamentals at home, rocky overseas markets are continuing to dent local consumer confidence.” Craig James, Chief Economist of the Bank’s broking subsidiary CommSec and author of the BSI, added the fragility of the ongoing recovery is reflected in the May figures. “We saw a 1.9 per cent increase in seasonally adjusted terms this month, which is a solid growth. However, this is yet to flow through on our trend estimates, with the BSI posting the slowest trend growth rate in nine months,” said Mr James. “Consumer confidence is still fragile, due mainly to international factors and general uncertainty about a number of domestic economic issues. So while spending is continuing to rise, there is still uncertainty about whether momentum will be maintained. The good news is that interest rates have been cut twice in two months. If the international environment settles and wider fears are allayed, then the outlook for consumer spending would markedly improve.” Industry analysis – disparity amongst sectors continues Five of the industry sectors fell in May, up from four in both March and April. The strongest monthly trend increase in sales occurred in the Wholesale Distributors & Manufacturers sector (up 2.7 per cent), followed by Amusement & Entertainment sector (up 1.8 per cent), Mail Order & Telephone Order Providers (up 1.5 per cent), Contracted Services (up 1.1 per cent), and Service Providers (up by 1.0 per cent). Amongst the weakest sectors in May was Clothing stores, (down by 0.7 per cent), with both Automobile & Vehicle Rentals and Professional Services & Membership Organisations down by 0.2 per cent. In annual terms, four of the 20 industry sectors contracted in May, a similar result to both March and April. The weakest sector was Hotels & Motels (down 6.7 per cent) followed Automobiles and Vehicle Rentals (down 0.6 per cent). At the other end of the scale, spending was strongest at Amusement & Entertainment (up 21.2 per cent), followed by Mail Order/Telephone Order Providers (up 16.7 per cent), Retail stores (up 12.2 per cent), Contracted Services (up 8.2 per cent), Clothing Stores (up 7.5 per cent) and Transportation (up 7.0 per cent). State analysis – weakness continues in TAS and NT The trend BSI has now risen for 11 straight months in Queensland and for 10 straight months in South Australia, NSW, Western Australia and Victoria. After eight straight months of gains, sales in the Northern Territory have fallen for the past three months. Two of the states and territories recorded weaker sales in trend terms in May. Sales in Tasmania fell by 0.4 per cent, while sales fell 0.1 per cent in the Northern Territory. The strongest result was in South Australia (up 0.9 per cent) followed by Queensland (up 0.7 per cent), ACT (0.5 per cent), NSW (up 0.3 per cent), Western Australia (up 0.2 per cent) and Victoria (up 0.1 per cent). In annual terms, strongest growth was posted in South Australia (up 11.8 per cent), followed by Queensland (up 9.1 per cent) and Western Australia (up 6.9 per cent). After 22 months of declines, sales in NSW have now risen in annual terms for the past two months. For more information please contact: Tim Mullen Public Relations Advisor (02) 9118 1667 tim.mullen@cba.com.au About the Commonwealth Bank Business Sales Indicator The Commonwealth Bank Business Sales Indicator is calculated by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities throughout Australia (approximately 30 per cent of the market). The Business Sales Indicator has been devised to provide a monthly assessment of spending trends in the Australian economy (covering 20 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. To better gauge the direction and changes of spending across the economy, the Business Sales Indicator is tracked in trend terms. 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 Business Sales Indicator 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 cover just spending at retail establishments, and exclude spending at a raft of other businesses. The Business Sales Indicator includes transactions made at traditional retail establishments such as supermarkets, clothing stores and cafes & restaurants and as such is more comparable to the ABS Household Final Consumption Expenditure released on a quarterly basis. The Business Sales Indicator 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 Business Sales Indicator includes industry sectors based on the International Merchant Category Code (MCC) categories. MCC is a four-digit number assigned to a business when the business first starts accepting cards as a form of payment. Source: http://www.1888pressrelease.com/hope-returns-for-businesses-as-consumer-spending-lifts-pr-404761.html |
|
