CBA produces a monthly index called the Business Sales Index, which compiles credit card usage to offer a read on domestic expenditure trends. Right now it’s not so good:
Economy-wide spending has slowed to a crawl, growing at the slowest pace in 10 months according to new data. In trend terms the Commonwealth Bank Business Sales Indicator (BSI), lifted by just 0.2 per cent in July, the slowest pace since September 2012.
The more volatile seasonally adjusted estimate of spending fell by 2.0 per cent in July after falling by 2.1 per cent in June and expanding by 5.4 per cent gain in May. Annual growth remains firm however at 6.9 per cent, up from 4.4 per cent in June.
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, five of the 19 industry sectors contracted in trend terms in July, similar to the June result and up from four sectors in May. But only of the eight states and territories recorded weaker sales in trend terms in July – a similar result to the May and June results.
The Commonwealth 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.
It’s interesting to note the the post GFC trends of slumping spending with the mining boom and then turnaround as rates began to fall with clear Christmas spikes.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
