CommSec has today released its Bank Business Sales Indicator for June, which tracks spending broadly across the economy by measuring the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities. According to CommSec, economy-wide spending growth has slowed to its weakest pace in two years, with spending in June 0.2% below the decade average in trend terms:
Economy-wide spending slowed again in June and growth is now the weakest in almost two years.
The Commonwealth Bank Business Sales Indicator (BSI) – a measure of economy-wide spending – rose by 0.3 per cent in trend terms in June – the slowest growth in 21 months.
The more volatile seasonally adjusted estimate of spending fell by 0.4 per cent in June but after an upwardly-revised 0.2 per cent gain in May (previously reported as a 1.3 per cent decline). It was only the first fall in sales in four months. However, annual growth lifted from 6.1 per cent to 8.1 per cent. The seasonally adjusted and trend estimates of the BSI results are derived via the SEASABS statistical program from the Australian Bureau of Statistics. At a sectoral level, nine of the 19 industry sectors contracted in trend terms in June, up from eight sectors in both April and May. But sales only fell in two of the State & territories…
The latest BSI result highlights the slowdown that is taking place across broader economic activity. The Federal Budget and warm autumn weather have been the key influences causing consumer and business spending to soften. These influences could prove temporary only time will tell.
Other things equal, the slowing of the BSI hints that household final consumption expenditure will detract from June quarter GDP.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
