From COMMSEC:
According to the Commonwealth Bank Business Sales Indicator (BSI), economy-wide spending grew at the slowest pace in almost three years in August. The boost to business spending from the budget has now faded with sales at Business Services outlets posting the biggest fall in spending in six months.
The overall BSI rose by 0.2 per cent in trend terms in August in trend terms after lifting by 0.4 per cent in July and 0.5 per cent in June. Annual growth slowed from 7.1 per cent to 6.6 per cent in August but is still above the decade-average trend of 5.1 per cent.
The Commonwealth Bank 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.
The bout of volatility on global financial markets as well as the lower Aussie dollar appears to have spooked consumers and businesses. Whether it is a short term and tactical retreat from retailers, service providers and business outlets remains to be seen. More settled global markets and a reduction of political uncertainty should lead to a return to more “normal” spending growth.
I don’t usually post this indicator because it only correlates with wider spending patterns on really big moves for some reason. But the fading pulse for “Tony’s tradies” is noteworthy if not unexpected…
