The Commonwealth Bank Business Sales Indicator (BSI), a measure of economy-wide spending, fell by 0.9 per cent in July, after rising 1.7 per cent in June.
The Business Sales Indicator was flat in trend terms for the fifth straight month. Over 2015, economy wide spending lifted by an average of 0.5 per cent a month in trend terms, compared with just 0.1 per cent over the first seven months of 2016. Annual growth also slowed from 3.9 to 3.5 per cent, the weakest annual growth since March 2012. The annual growth rate had held at above-normal levels of between 7 and 7.6 per cent between April and November 2015 before slowing markedly over 2016.
The overall result was dragged down by weakness in business services and government spending and may have been influenced by election uncertainty. Before the election period, consumers and businesses may have been reluctant to spend ahead of the UK vote on European Union membership.
Across states and territories in July sales fell just in NSW (down 0.3 per cent) – the third month of declines. Of the other states and territories, strongest was Northern Territory (up 0.6 per cent), followed by South Australia (up 0.4 per cent) ACT and Victoria (both up 0.3 per cent). Western Australia and Tasmania (both up 0.2 per cent). Sales were broadly flat in Queensland.
The Commonwealth Bank BSI is obtained by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities. The BSI covers spending broadly across the economy rather than just retail sales, including spending on automobiles, personal services and airlines.
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