Monday, June 17, 2024

Solid spending growth continues in October

Economy-wide spending growth remained firm for the third month in a row in October, with every state and territory experiencing a lift in sales, according to the latest Commonwealth Bank Business Sales Indicator (BSI).

Economy-wide spending grew in October by 0.6 per cent in trend terms, the same figure as for the preceding three months, although down from the 0.7-0.8 per cent increases seen from March to June. With growth in the latest month, economy-wide spending has now risen in every month back to mid-2011.

Annual growth in spending also remained steady, at 7.5 per cent – similar to growth experienced for the past six months – staying well above the decade average of 5.1 per cent.

The more volatile seasonally-adjusted measure of the BSI posted a 0.5 per cent gain in October, down from a strong 3.3 per cent increase in September, while annual seasonally-adjusted growth eased from an 11-month high of nine per cent to 7.4 per cent.

CommSec Chief Economist Craig James says businesses will be hoping for a lift in sales growth in the lead-up to Christmas.

“With spending growth remaining solid in October, businesses will really be hoping that this continues over the coming months,” he said. “Annual growth figures still show that economy-wide spending remains above the decade average, and this continues a long stretch of positive annual growth dating back to early 2012.

“Australian businesses have reasons for optimism ahead of Christmas, given a lower Aussie dollar, declining unemployment, positive consumer sentiment and interest rates near generational lows.”

Sales in October rose in trend terms in every state and territory across Australia. Tasmania again experienced the strongest growth, up 1.3 per cent, with Western Australia (up 0.6 per cent), NSW (up 0.5 per cent), South Australia, Victoria and the ACT (all up 0.3 per cent), Queensland (up 0.2 per cent) and the Northern Territory (up less than 0.1 per cent) also experiencing growth.

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