- Spending across the Australian economy remained firm ahead of the federal election, according to patterns observed by the Commonwealth Bank, Australia’s largest retail bank.
- Sales were particularly strong at amusement and entertainment businesses and accommodation providers, likely reflecting the timing of the Easter and Anzac Day holidays.
- Sales at clothing stores went backwards, possibly due to warm weather across many parts of the country.
- The Commonwealth Bank’s spending measure slowed sharply in the second half of last year, mirroring official household consumption data released by the ABS. The recovery in early 2019 suggests household spending may have firmed in the March quarter.
Spending across the Australian economy remained firm ahead of the federal election, according to data released today from the Commonwealth Bank.
It’s Business Sales Indicator (BSI) — a measure on economy-wide electronic spending through the bank’s payment platforms — grew by 0.5% in April in trend terms, leaving total spending up 5.3% from 12 months earlier.
The April increase was marginally below the 0.6% trend growth seen in both February and March, but remained above average levels.
Over the period from October 2017 to January 2018, the BSI consistently recorded monthly gains of between 0.7-0.8% a month. Growth in sales trended down over 2018, reaching 0.3% a month from September to November 2018,” CommSec, the bank’s trading business, said in a note following the April BSI.
“Monthly growth rates lifted from December and held 0.5-0.6% per month in the period since, above the long-term average pace of 0.4%,” it said.
The slowdown in the BSI in the latter parts of 2018 was replicated in official household consumption data released by the ABS in Australia’s national accounts.
The recent recovery in the BSI suggests household consumption, the largest part of the Australian economy at a little under 60%, may have improved in the early parts of 2019.
According to the Commonwealth Bank, the BSI is obtained by tracking the value of credit and debit card transactions processed through its merchant facilities.
Given it tracks expenditure across the economy, not just at retailers, the bank says the BSI is comparable to nominal household consumption in Australian GDP.
The ABS will release Australia’s Q1 GDP report in early June.
In April, the BSI rose in trend terms in 15 of the 19 industry sectors monitored, led by stronger spending at amusement and entertainment businesses and at hotels and motels.
“With Easter falling in April this year, the economy saw a sharp lift in spending on entertainment as well as domestic accommodation,” said Craig James, chief economist at CommSec.
“It’s good to see Aussies taking advantage of the good weather and the longer time off in order to get away or spend some time with family and friends.”
While spending increased in most categories of note, spending declined at clothing stores, something James put down to unseasonably warm weather in many parts of the country.
“As we continue to experience an unseasonably-warm Autumn, it seems that many Aussies have decided to put off updating their winter wardrobes,” James said.
By location, sales rose in trend terms in all locations except for the Northern Territory in April with the strongest increase seen in Queensland where spending rose by 0.9%. Solid growth of 0.8% was also seen in Tasmania and Victoria.
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