Spending on the go-slow

Spending on the go-slowThe Commonwealth Bank’s latest Business Sales Indicator (BSI) shows that economy-wide retail spending slowed for the fifth month in a row in May, and that sales growth is at its slowest in 10 months.The BSI results show that retail sales grew by 0.3 per cent in trend terms in the month of May, compared with gains of 0.4 per cent in April and 0.6 per cent in March. In seasonally adjusted terms, sales fell 1.3 per cent in May.Annual growth eased from 11.5 per cent in April in seasonally adjusted terms to a 21-month low of 4.0 per cent in May.In spite of the slowdown in spending, sales across the economy have now expanded for the past 21 months in trend terms.According to the Commonwealth Bank, the slowdown in retail spending can be attributed to the late onset of winter, which has reduced spending on clothing and utilities, but a rebound is on the cards in coming months.The author of the BSI report sees other reasons for confidence, citing the underlying strength of the Australian economy as providing a solid platform for future growth. In addition, a steady unemployment rate, and indications that interest rates are likely to remain at current levels until at least November or December, suggest this month’s subdued sales figures may be temporary.The BSI is a key measure of spending trends around Australia. It tracks the value of credit and debit card transactions processed at businesses with CommBank merchant facilities.To download the latest report, go to: https://www.commbank.com.au/business/can/business-insights/business-sales-indicator.html