Retail helps lift spending in January
Retailers can finally heave a sigh of relief, as consumers finally lifted spending in retail stores in January.
The Commonwealth Bank Business Sales Indicator (BSI) shows overall spending rose 1.1 per cent in trend terms in January – the fastest monthly growth in four years.
All but one of the 19 industry sectors recorded an increase in trend terms, and sales were up in every state and territory in the month.
CommSec chief economist Craig James said the growth was driven by retail spending, as well as increased spending on government services and transportation.
“We are currently experiencing a strong economic environment that is being influenced by greater job growth and positive consumer confidence,” he said.
Retail store spending rose 1.7 per cent in January – its biggest jump since July 2009.
Sales at combined retail and clothing stores rose by 0.7 per cent in trend terms, and with the sectors accounting for 40 per cent of the CBA BSI, strength in these sectors is expected to strongly influence economy-wide spending.
The BSI measures the value of credit and debit card transactions processed through the bank’s merchant facilities.
“The big lift in retail stores has been influenced by a strong job market and heightened competition, driving lower selling prices,” James said.
Spending on government services was also up 1.6 per cent in the month, while transportation rose 1.5 per cent.
The more volatile seasonally-adjusted measure of the BSI rose by 1.5 per cent in January – the fifth gain in six months.
Sector-wise, Mail Order/Telephone Order Providers was the only sector to record a fall in spending – down 5.2 per cent.
Transportation (up 15.9 per cent); Amusement & Entertainment (up 15.8 per cent) and Airlines (up 14.0 per cent) were the best performing sectors.
Among states, Victoria showed the strongest growth (up 1.4 per cent), followed by NSW (up 1.1 per cent), Western Australia, Tasmania and Queensland (up 1.0 per cent each).