The February Business Sales Indicator (BSI) from the Commonwealth Bank has revealed a modest growth of 0.1 per cent for the second month in a row, highlighting a decline in the growth rate during the last five months.
The past three years (43 months) has seen a rise in economy-wide spending, pushed to a 0.5 per cent growth in October 2014. Since then, the BSI has seen an incremental decline. 0.4 per cent was registered in November 2014, 0.2 per cent in December 2014, and 0.1 per cent in January and February this year.
Craig James, CommSec Chief Economist and Author of the BSI report, said the results suggest cautious nationwide spending after the Reserve Bank of Australia lowered the interest rate to 2.25 per cent in early February.
“The February BSI suggests that people have so far been slow to take advantage of the rate cut that came into effect at the beginning of the month. However, businesses should be optimistic that sales will pick up in the near future, when consumers start to really feel the difference of those extra dollars in their pockets. The lift in home building and purchases should also contribute to stronger sales activity,” Mr James said.
“The recent drop in unemployment coupled with falling commodity prices, particularly oil, will provide a further boost to the economy in 2015. Business owners should look to get a plan in place now to ensure they capitalise fully on these favourable conditions.”
Mail Order/Telephone Order Providers were revealed to be the biggest gainers under overall industry analysis, registering a rise of 1.8 per cent in February. Hotels & Motels (1.3 per cent) came next, followed by Miscellaneous Stores (1.0 per cent) and the large Retail Stores sector (0.4 per cent).
The 19 industry sectors performed modestly well overall, with only six registering a fall in spending. Business Services (- 4.1 per cent) saw the biggest decline, followed by Automobile & Vehicle Sales (- 2.5 per cent) and Professional Services & Membership Organisations (0.6 per cent).
Tasmania came out on top under the State by State Analysis, registering a rise of 0.2 per cent in February. South Australia also saw a small rise, climbing just 0.1 per cent. The rest of the country did not fare too well, with NSW dropping 1.7 per cent, Northern Territory down 1.6 per cent, Victoria down 1.2 per cent, Queensland down 0.2 per cent and both Western Australia and the ACT down by 0.1 per cent.