Positive figures were recorded in January across all state and territories for the fourth straight month by the latest Commonwealth Bank business sales indicator (BSI).
The BSI, which tracks the value of credit and debit card transactions processed through Commonwealth Bank point-of-sale terminals, showed a 0.6 per cent increase in trend terms, following a 0.7 per cent gain November and December.
According to Matt Comyn, executive general manager, local business banking, Commonwealth Bank, the positive result was a welcome start to the New Year, with businesses benefiting from a continued rise in spending.
"Despite ongoing economic concerns being felt both here and overseas, sales figures in most industries are ticking up and have been for some time now,” he said.
"That means that there is still a certain level of confidence amongst consumers – even if it is relatively weak – which is translating into spending activity. While the improvements are a good sign, there are a range of factors that contribute to consumer confidence; the ongoing fluctuations we are seeing in the global economy therefore make it difficult to forecast how strong the recovery will be.”
Industry wise, while many sector remains weak, retail stores were a surprise performer. Clothing stores (up 2.3 per cent), Mail Order & Telephone Order Providers (up 2.0 per cent) and Retail Stores (up 1.5 per cent) recorded consecutive gains while hotels & motels (down 1.3 per cent) and service providers (down 0.7 per cent) were down.
Comyn also added that the figures were yet another reminder of the patchy performance of spending throughout the Australian economy.
"It's important to remember that these figures also look at a range of industries across the economy, so where we saw weakness in sectors such as Hotels & Motels, we also witnessed strength in Clothing Stores and, perhaps surprisingly, Retail Stores, which seems to have improved despite ongoing challenging conditions," he said.
"It's likely that the disparity across sectors will continue, most likely for the remainder of this year at the very least. That means that companies will need to remain focused on driving greater productivity and efficiency if they are to remain competitive.”
Craig James, chief economist of the Bank’s broking subsidiary CommSec and author of the BSI, said that the latest figures meant the Reserve Bank had received some validation for its decision not to cut rates in February.
“We have seen economy-wide spending growing again in January and the results also align with the Reserve Bank's view that activity in the services sector has generally proved stronger than physical goods sales,” he said.
“The strength in business sales is apparent at both a sector and State and Territory level. In January there were only four sectors recording negative growth and for the fourth straight month, all of the eight states and territories recorded higher sales in trend terms.”
James also highlights however that more ongoing improvements will be needed in consumer confidence to see a larger number of businesses benefiting.