Australian businesses respond to Federal Budget with record sales growth finds CBA
Although it’s only early days, it appears Australian businesses have responded positively to the stimulus measures in the recent Federal budget with businesses achieving the highest sales growth in three years last month.
According to the latest Commonwealth Bank Business Sales Indicator (BSI), the business services sector which includes businesses such as office furniture, commercial equipment, computer equipment and software have experienced a spending growth of 1.9% in May - the biggest rise since May 2012.
The BSI which measures economy-wide spending by tracking the value of credit and debit card transactions processed by CBA point-of-sale terminals grew by 0.8% in May, while annual sales growth stood at 7.5%, well above the decade average of 5.3%.
“May’s growth in sales will be welcome news for Australian business owners, suggesting businesses and consumers across the country are feeling confident about spending off the back of the Federal Budget,” said Claire Roberts, Executive General Manager, Local Business Banking, Commonwealth Bank.
Across the 19 industry sectors analysed, only two recorded a drop in spending over the month - airlines and mail order/telephone order providers. Among the strongest sectors in May were government services which recorded the highest growth of 3.1%, followed by amusement and entertainment and business services.
In terms of states, the highest growth was in South Australia (up 1.3%), followed by ACT and Victoria. Meanwhile, Western Australia, NSW and Queensland all experienced the same growth (up 0.9%) followed by Tasmania, and Northern Territory.
Chief Economist at CommSec and author of the BSI report, Craig James said “the latest sales figures indicate that consumer spending will continue to rise in the year ahead, fuelled by low interest rates, a firmer job market and improving economic outlook.”
“The growth experienced by a number of industry sectors in May also suggests that businesses are responding to the stimulus measures in the latest Federal Budget, like new tax breaks for small businesses,” he said.