Australian consumers are opening their wallets, according to the Commonwealth Bank’s latest measure of economy-wide sales through its network of merchant facilities across the country.
The September Business Sales Indicator (BSI), which tracks credit and debit card transactions, grew 0.7% in trend terms and the CBA says “to find stronger growth you would have to go back 2½ years”.
There has been a clear acceleration in the pace of sales growth, the CBA said.
“Over the first half of 2016, economy-wide spending grew on average by 0.2 per cent a month, however, it has strengthened over the last three months, lifting by 0.4 per cent in July, 0.6 per cent in August and 0.7 per cent in September,” the BSI shows.
Seasonal adjusted spending is also strong with August’s robust 1.1% growth rate followed by a 0.6% increase in September.
CommSec chief economist Craig James said “the latest data shows spending has not only recovered after the uncertainty associated with the Brexit vote and the federal election, but the gains are broadbased”.
Indeed, the sectoral analysis shows that 16 of 19 industries tracked through the CBA’s merchant facilities rose during September. The strongest gains were recorded in Amusement and Entertainment (+1.8%) with Hotels & Motels (+1.2%) next best. Business services was the biggest loser, falling 2.3%.
Across the states NSW (+0.9%) was the strongest performer with Queensland, Victoria, and encouragingly, Western Australia, all up 0.7%. South Australia grew 0.6% while on the negative side of the ledger the ACT dipped 0.3% and the Northern Territory dropped 0.3%. Tasmania was up 0.1%.
This data supports recent solid data from the monthly NAB and Dun and Bradstreet surveys of Australian business and suggests the domestic economic expansion continues and is solidifying.