Economy-wide sales increased in Australia by just 0.3% in October, the lowest level of growth in two years, according to the Commonwealth Bank’s October Business Sales Indicator.
The results of the latest indicator, which measures credit and debit card transactions via the Commonwealth Bank, fits an overall pattern of slower sales growth over the past six months.
The October rate compares with 0.4% in September, 0.5% growth in August, July and June, and 0.6% in May and April.
Annual growth in seasonally adjusted sales eased to 8% from 9.2%, but was still above the 6.4% long-term average.
Adam Bennett, Executive General Manager Local Business Banking, Commonwealth Bank, says the trend of slowing sales growth will be concerning for businesses.
However, he says the overall picture is more positive one, with sales having now increased for 39 months in a row and annual growth consistently above the long-term average.
“It’s important for businesses to go into the festive season with a plan to maximise their performance in this typically busy trading period,” he says.
“Or if your business slows down over Christmas, use the time to prepare a business plan for next year to ensure you capitalise on sales when things pick up.”
Craig James, Chief Economist at the Bank’s broking subsidiary CommSec, says economic conditions are generally favourable for future sales growth.
“Consumer confidence is good, but by all means not great,” he says. “But there are signs of improvement in the job market while higher housing prices and construction are serving to underpin spending.”
The only state which didn’t see an increase in sales in October was NSW, where sales were unchanged in the month. The flat result in NSW follows generally strong growth over the past 25 months.
Of the other states and territories, leading the gains was the ACT (up 1.7%). South Australia, Western Australia and Tasmania also saw solid gains in growth (all up 0.7%). Victoria came slightly behind them at 0.6% growth, and Queensland achieved 0.5% sales growth.