There has been a slight increase in consumer spending across the month of January, according to the Commonwealth Bank’s latest Business Sales Indicator (BSI).
In trend terms, the BSI has grown by 0.2 per cent during January, pushing the BSI up by 6.8 per cent in annual terms. This places it above the five-year average of 2.7 per cent. Nevertheless, the findings point to a decrease in sales growth for the past five months, highlighting January as the slowest growth in spending since 2012.
Craig James, author of the BSI report and Chief Economist at CommSec, said businesses should look at the relatively stable position of the economy as a sign to plan for growth throughout the year and to “take advantage of the expected increase in household disposable income.”
“With costs easing up for many households following the fall in petrol prices and recent interest rate cut, we can expect many consumers to slowly start opening their wallets and increase their spending as we progress through 2015,” Mr James said.
According to the BSI, which measures spending by tracking credit and debit card transactions processed through Commonwealth Bank point-of-sale terminals, the small increase in consumer spending saw a rise in 11 of the 19 sectors in trend terms.
Hotels & Motels rose by 1.5 per cent, marking it as the strongest performer in January. Transportation (up 1.0 per cent), Service Providers (up 0.7 per cent) and Miscellaneous Stores (up 0.7 per cent) followed.
Business Services saw the biggest drop with a fall of 4.1 per cent. Mail Order/Telephone Order Providers (down 1.5 per cent) also saw a fall, followed by Automobile & Vehicle sales (down 1.5 per cent) and Professional Services & Membership Organisations (down 0.8 per cent).
In terms of the country’s states, the ACT saw the biggest sales increase in trend terms, registering a BSI rise of 0.7 per cent. Tasmania’s rise of 0.5 per cent placed it in second place, followed by Western Australia (up 0.3 per cent) and Queensland (up 0.1 per cent).
The biggest fall in sales was seen in New South Wales, which registered a drop of 2.0 per cent. The Northern Territory saw a decrease of 1.1 per cent, South Australia was down 0.6 per cent, and Victoria was down by 0.3 per cent.