The annual growth rate for economy-wide spending has reached its strongest level in over five years, according to the latest Commonwealth Bank Business Sales Indicator.

Economy-wide spending lifted by 1 per cent in trend terms in June, pushing annual growth rate to an 8.7 per cent high. June marks the tenth consecutive monthly increase in spending in trend terms and the fifth straight month that growth has exceeded 1.0 per cent. The 1.0 per cent trend increase was down from 1.1 per cent in May and the 1.2 per cent gains seen in March and April.

At a sector level, 17 industry sectors expanded in trend terms in June.

Craig James, chief economist at the Bank’s broking subsidiary CommSec, believes the latest results provide a positive sign for many sectors.

“The June results are positive for many sectors. The retail stores sector in particular has been performing well, and spending increased again this month by 1.6 per cent. This was potentially buoyed by the weakening AUD, coupled with end of financial year sales, but the overall performance should provide a positive outlook for many retailers,” he said.

“What is promising for businesses is that we are now seeing consistent consumer spending patterns form, independent of external spending incentives or overtly positive economic news.”

All states and territories recorded stronger sales in June. Sales rose most in the Australian Capital Territory (up 1.8 per cent), followed by New South Wales (up 1.5 per cent) and South Australia (up 1.1 per cent).

In annual terms, all states and territories posted increases. Strongest growth was posted in the Australian Capital Territory (up 16.4 per cent), followed by South Australia (up 12.7 per cent), New South Wales (up 10.3 per cent), and Tasmania (up 7.9 per cent).

Adam Bennett, executive general manager, local business banking, Commonwealth Bank, believes the June BSI results should provide good news for businesses as spending discrepancies between sectors begins to contract.

“Throughout 2013 we’ve seen consistent consumer spending patterns form, with back-to-back sales gains posted. However, what is particularly pleasing for businesses in June is that when you look beyond overall spending figures, the increase in sales is starting to disperse to most sectors. We have seen sales in the Automobiles & Vehicles sector turn positive, and sales in the Mail Order/Telephone Order Providers sector rise for the second month, after months of consistent declines,” he said.

“We have now seen back-to-back increases for ten consecutive months. With consumer spending showing signs of momentum, this is a great platform for many businesses as they embark on a new financial year.’