Annual sales growth remained above the decade average in August, despite experiencing the slowest monthly growth in almost three years, according to the latest Commonwealth Bank Business Sales Indicator (BSI).
Economy wide spending lifted 0.2 percent in trend terms in August after growth of 0.4 percent in July and 0.5 percent in June. Annual growth of spending eased for the third month to 6.6 percent, still above the decade average of 5.1 percent.
The more volatile seasonally adjusted measure of the BSI fell one percent in August, the second fall in six months, while annual growth eased from 7.3 percent to 5.6 percent.
Craig James, chief economist, CommSec and author of the BSI report, said that despite the mild sales growth recorded in August, the Australian economy is still in good shape and continuing to grow.
“While the initial boost in business spending following the last Federal budget has tapered off, annual growth figures show that economy wide spending remains above the decade average. Interest rates are low, the job market shows signs of settling and home building is underpinning spending across the economy,” said Mr James.
“Additionally, Australian businesses have reasons for optimism given a lower Aussie dollar and budget stimulus measures for the small business sector.”
At an industry level, sectors to experience the strongest growth were clothing and miscellaneous stores, both rising 1.1 percent in trend terms respectively in August. Professional services and membership organisations and transport also grew (both up 0.7 pe cent).
At the other end of the scale, sectors to experience a decline in sales in trend terms included airlines, down 4.4 percent; and mail order/telephone order providers, down 3.5 percent. Business services also contracted in August, falling 0.5 percent – the largest decline since February this year.
In annual terms, six of the 19 industry sectors contracted in August, including utilities, mail order/telephone order providers; automobile and vehicle sales; and business services.
Meanwhile, sectors to record strongest growth were hotels and motels; miscellaneous stores; personal service providers; clothing stores; and wholesale distributors/manufacturers.
Sales rose in all states and territories in August except the Northern Territory, down 0.5 percent, and Victoria, down 0.1 percent.
Tasmania recorded the highest growth, up 0.8 per cent; followed by South Australia, 0.7 percent; Western Australia; up 0.5 percent; Queensland, 0.4 percent; and the Australian Capital Territory, up 0.1 per cent; while NSW recorded flat sales.
In annual terms, the ACT recorded the strongest growth, up 12.3 percent; followed by SA, 8.3 percent; WA, 7.8 percent; Tasmania, 7.7 percent; and Queensland, 6.7 percent.
Three states and territories recorded sales figures below the previous year: NT, down 7.9 percent; NSW, 5.9 percent; and Victoria, down 0.2 percent.
The BSI is a key measure of economy-wide spending, tracking the value of credit and debit card transactions processed through Commonwealth Bank point of sale terminals.