Australian consumer spending is beginning to recover, with August sales the strongest in nine months, new figures have revealed.
The Commonwealth Bank Business Sales Indicator edged up by 0.1% last month, the first positive change since November last year.
The figures, which are based on the value of credit and debit card transactions via CommBank, show that, despite the improvement, sales are still well below the long-term average of 0.5%.
The strongest sector in August was utilities, up 1.4%, and professional services and membership organisations, up 1%. However, retail stores dipped by 1.7% and mail and telephone order providers dropped by 1.6%.
Only two of the eight states and territories recorded negative monthly growth in August – Victoria and ACT.
CommBank says that the results were aided by a firming job market.
It adds: “Retailers won’t be popping champagne corks just yet, but the trend is encouraging. However retailers are aware that they will need to keep discounting and focussing on ‘value for money’ in order for consumers to part with their cash.”
“The longer the Reserve Bank keeps interest rates on hold, the more confident consumers will become about opening their wallets. But the RBA would need solid justification from a higher inflation reading to lift rates in the next few months.”
“It’s possible that the CBA BSI could understate the growth of spending in the economy if the broad trends in favour of cash purchases and sales in the economy intensify. Certainly it is something worth watching in coming months.”