In what could be positive news for retailers in Australia, recent statistics from the Commonwealth Bank have shown that consumer spending has risen by 0.4 per cent in trend terms.
The bank’s recent ‘Business Sales Indicator’ (BSI) showed that spending is continuing its upward trend and rose for the seventh month in a row, taking the annual growth rate to 4.9 per cent in trend terms.
The BSI measures expenditure by tracking the value of debit and credit card transactions through Commonwealth Bank’s point-of-sale terminals.
The rise in March was the smallest for seven months, with February seeing a higher rate of 0.7 per cent.
However, this is not negative news, as the general upward trend over the past few months is an increasingly positive indicator for businesses in Australia.
“Although March saw the smallest gain in spending in six months, consumers are continuing to open their wallets and this should be taken as a positive sign for businesses,” said Commonwealth Bank’s local business banking executive general manager Adam Bennett.
“Consumer spending has increased for seven straight months now and businesses should take this a strong indication that consumers are willing to spend on a consistent basis.”
Chief economist at CommSec Craig James stated that businesses should remain “confident but cautious”, as growth over the next 12 months is predicted to be slow.
Retailing in Australia experienced an 8.3 per cent increase in consumer spending in annual terms, coming second to Amusement & Entertainment combined with Wholesale Distributors and Manufacturers at 11.3 per cent.
As growth in consumer spending is predicted to be subdued over the next year, it’s important for businesses to create and maintain a comprehensive retail strategy so that spending can continue its upward trend.