The latest edition of the Commonwealth Bank’s Business Sales Indicator (BSI) is out and shows that spending growth in the economy is still growing at a robust pace.
The BSI, which is calculated by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities throughout Australia, showed “spending grew by 0.4 per cent in November in trend terms, after lifting by 0.5 per cent in October.”
That’s down on the 0.6 per cent increases seen in July-September the bank said an the November result “continues the uninterrupted trend of economy-wide spending growth each month back to mid-2011.”
That means “annual growth of spending also remained solid at 7.3 percent – up slightly from 7.2 per cent in October – remaining well above the decade average of 5.1 per cent,” the bank said.
While the trend result is strong the seasonally adjusted data for the month showed a 0.8% fall in November. That dragged the annual growth rate down from 8.9% to 6.1%.
We asked Craig James, CommSec chief economist, why the focus on the trend and not the seasonally adjusted data when reporting the BSI. He said that seasonally adjusted data can be volatile and that with “only 2 declines in seas adj series in last nine months; and up 6.1% over the year when you stand back, sales remain healthy.”
Looking at the breakdown of the survey, which covers 19 industries across Australia, the CBA said “a range of non-mining sectors (are) contributing to a re-balancing of the economy.”
The bank noted that the “business services sector continued to rise, posting 2.8 per cent growth in November – the ninth consecutive month of growth in business sales. Hotels and motels also experienced a lift of 2.6 per cent, driven by the growth in tourism from the low Aussie dollar; and retail sales grew by 0.5 per cent in the lead up to Christmas.”
Underlining the positive outlook for retail sales this Christmas the CBA last week provided Business Insider exclusive data which showed that in the first week of December the bank was tracking a 29% increase in card transactions ahead of Christmas.
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