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Economy-wide sales shrank by 0.3 per cent in November, according to Commonwealth Bank’s latest Business Sales Indicator (BSI). The decline follows a pattern of softening growth in recent months, with the BSI at -0.2 per cent in October, 0 per cent in September, and 0.2 per cent in August.
Craig James, Chief Economist at the Bank’s broking subsidiary CommSec and author of the BSI report said despite this slight decline in recent months, economic conditions were generally favourable for future sales growth in December and into 2015.
“There are promising signs that the job and housing markets are stabilising, so we’re expecting spending to recover from the slight downturn we’ve seen in recent months. Businesses should make preparations now to ensure they can make the most of improvements in consumer confidence in 2015,” said Mr James.
INDUSTRY ANALYSIS
In November, spending rose in 12 of the 19 industry sectors. The strongest performers were Service Providers (up 3.7 per cent); Transportation (up 2.1 per cent); Amusement & Entertainment (up 2 per cent); Airlines and Hotels & Motels (both up 1.8 per cent); and Wholesale Distributors & Manufacturers (up 1.0 per cent).
Conversely, contractions were recorded in Government Services (down 8.7 per cent); Mail Order/Telephone Order Providers (down 3.0 per cent); Business Services (down 1.6 per cent); Utilities (down 1.1 per cent); Professional Services & Membership Organisation (down 1.0 per cent); and Automobile/Vehicle rentals (down 0.8 per cent) and Automobile/Vehicle sales (down 0.2 per cent).
STATE BY STATE ANALYSIS
Across the states and territories, New South Wales was the only state where sales contracted in November (-1.1 per cent), the fourth month of declining sales for the state.
Leading the gains in the other states and territories was the Australian Capital Territory (up 2.0 per cent), followed by South Australia (up 0.2 per cent), Western Australia, the Northern Territory and Tasmania (all up 0.6 per cent), followed by Queensland (up 0.4 per cent), and Victoria (up 0.3 per cent).
The trend BSI has now risen for 41 straight months in Queensland, for 33 months in Tasmania, and for 26 months in South Australia. Sales in Victoria have been higher for 41 consecutive months.
YEAR IN REVIEW
In annual terms, the November BSI was up 5.6 per cent from last year, meaning it fell below the long-term average or normal growth pace of 6.3 per cent. Overall, 2014 was a year of increasing sales across the country, with growth recorded nationwide in every month until October.
Across the states and territories in 2014, consistent sales growth has been recorded throughout the year in Victoria, Tasmania, South Australia, and Queensland. The Northern Territory and Western Australia both saw more modest growth in 2014, with both experiencing either flat growth or a small contraction in the middle of the year.
The most dramatic change to the BSI in 2014 was in the Australian Capital Territory, which saw significant contractions in sales of 5.9 per cent in January, and 5.4 per cent in February, and has now returned to healthy sales growth of 2 per cent in November, and 2.1 per cent in October and September. New South Wales was the only state to move from growing to declining sales in 2014; the BSI is now at -1.1 per cent having started the year at 1 per cent growth. Four months of contracting sales followed 23 months of growth in the state.
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For further media enquiries please contact:
Sarah Gibbons
Commonwealth Bank
T: 0403 681 515
E:sarah.gibbons@cba.com.au
To find out more visit the BSI.