Business Sales Indicator rose 0.2% in December amid spending recovery

The Commonwealth Bank Business Sales Indicator rose by 0.2% in December, following similar gains in November and October, with just four out of 20 sectors contracting during the month.

The BSI, which is compiled monthly, is obtained by tracking the value of credit and debit card transactions processed through CBA merchant facilities throughout Australia.

The December result follows a 0.3% rise in November and a 0.2% rise in October, indicating the recovery in economy-wide spending is ongoing.

“Sales have now expanded for five consecutive months – the best run of gains since late 2009,” the report said.

At a sectoral level, just four out of 20 sectors contracted in trend terms in December, while all eight states recorded higher sales in trend terms during the month.

Mail order/telephone order providers recorded the strongest gain (up 3.3%), followed by clothing stores (up 1.7%) amusement and entertainment (up 1.3%) and retail stores (also up 1.3%).

“The weakest sector in December was miscellaneous stores (down 2.8%) followed by hotels and motels (down 0.9%), business services (down 0.3%) and utilities (down 0.1%),” the report said.

“Spending by business services has softened over the past three months.”

“Personal service providers, and professional services and membership organisations, have also recorded improved spending over the past five months.”

In annual terms, six sectors contracted in December, following a similar result in November. Not surprisingly, the weakest sector was retail stores, down 9.3% on a year earlier.

This was followed by miscellaneous stores (down 8.2%), automobiles and vehicles (down 2.6%) and hotels and motels (down 2%).

At the other end of the scale, spending was strongest at mail order/telephone order providers, up 19.4%, followed by amusement and entertainment (up 18.3%) and clothing stores (up 10.8%).

With regard to the states, the ACT recorded the strongest result, up 0.7%, followed by the Northern Territory and WA (both up 0.6%), Tasmania, Victoria, South Australia and NSW.

“The trend BSI for [the] Northern Territory has now risen for 10 straight months [while] Queensland and South Australia have recorded stronger trend spending growth for six straight months,” the report said.

“In annual terms, strongest growth was in the Northern Territory (up 3.7%), followed by the ACT (up 3.5%) and Western Australia (up 2.5%).”