Following a fall in business sales in both July and August, economy-wide spending rebounded in September, lifting by 3.9 per cent, according to the latest Commonwealth Bank Business Sales Indicator.

This jump marks the biggest monthly gain in four and half years and follows on from solid increases in May and June but declines in July and August. In a further boost for businesses, economy-wide spending is up 6.9 per cent on a year ago, after being up 3.4 per cent in the year to August.

The sectors that saw the largest sale growth were Hotels & Motels and Miscellaneous Stores (both up 1.0 per cent) followed by Repair Services (up 0.6 per cent) and Clothing Stores and Professional Services & Membership Organisations (both up 0.8 per cent).

Amongst the weakest sectors in September were Service Providers (down 3.2 per cent), Mail Order & Telephone Order Providers (down 2.7 per cent), and Airlines (nfp).

According to Adam Bennett, executive general manager, local business banking, Commonwealth Bank, while the rebound is positive for businesses, it remains to be seen if this increase can maintain momentum over the coming months.

“There was a significant rebound in spending in September, which saw the biggest monthly gain in over four years. However, while this is an encouraging result, businesses should be mindful that the data is volatile and presently consumers are not displaying any meaningful or consistent spending trends,” he said.

“Due to the ongoing inconsistencies we’ve experienced in recent months, it is as important as ever for businesses to have solid plans in place, and remain prudent as consumers continue to show signs of caution.”

Just one of the states and territories recorded weaker sales in trend terms in September. Sales in NSW fell by 0.3 per cent. The strongest results were in South Australia and Tasmania (both up 0.8 per cent) followed by Northern Territory (up 0.6 per cent), Queensland and the ACT (both up 0.2 per cent), and Victoria (up 0.1 per cent). Sales were flat in Western Australia.

The trend BSI has now risen for 16 straight months in Northern Territory, for 15 straight months in Queensland, for 14 straight months in South Australia and 12 straight months in the ACT.

Craig James, Chief Economist of the Bank’s broking subsidiary CommSec and author of the BSI, said the results are reflective of the patchy nature of the economy.

“Over the past five months, we have seen fluctuating peaks and troughs in consumer spending. The good news is that interest rate cuts are having tangible flow-on effects for businesses, which we’ve seen through several increases in spending this year,” he said.

“While we saw a 3.9 per cent increase in sales in seasonally adjusted terms this month, the less volatile trend measure has remained relatively flat for the past three months. Hopefully the recent interest rate cut in October will spur consumer confidence, and continue spending momentum in the lead up to Christmas.”