The good news has continued for a sixth consecutive month, with business sales rising in February, according to the latest results from the Commonwealth Bank Business Sales Indicator.
The figures come after three separate increases during the previous three months, indicating the good news may be a sustained uptick in retail confidence and not just an anomaly.
The news also comes after recent figures from Westpac show consumer confidence has continued to rise.
The latest results from the BSI show economy-wide spending grew by 0.4% in trend terms in February, which was the sixth consecutive monthly gain although the smallest in five months.
The seasonally adjusted measure increased by 0.2% in February, with annual growth now at 4.7%, in seasonally adjusted terms, and 4.8% in trend terms.
Adam Bennett, the executive general manager for local business banking at the Commonwealth Bank, said the results were promising.
“Although there was a slight decrease in the rate of growth in February, these results remain a positive sign for businesses. In trend terms we’ve now seen six straight months of gains, which indicates consumers are willing to spend even if they are still treading with caution.”
“However, businesses need to be mindful that we are still interacting with a persistently cautious consumer and that “these patterns will not significantly shift overnight,” he said.
The strongest increases were in amusement and entertainment, up 2.1%, followed by service providers up 1.3%, and transportation up 1%. Five of the industry sectors fell in trend terms during February, up from three in January.
The weakest sectors were mail orders and telephone orders, down 3.8%, business services, down 0.4% and contracted services, down 0.1%.
In annual terms, only three of the 20 industry sectors tracked fell in February, with airlines, mail orders and telephone orders and hotels all recording a decline.
In annual terms, no state or territory recorded sales lower than a year ago.
CommSec economist Craig James said the results indicate “we are undoubtedly in a better position than we were this time last year”.
“We have seen consumer spending respond in line with positive economic indicators, and this is contributing to the formation of back-to-back spending gains.”
However, he also presented a warning, saying consumers are still acting with caution and this could affect spending patterns in the short term.
“With the Reserve Bank holding the cash rate steady in February, we have seen consumers maintain cautious optimism when it comes to spending.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
