Economy-wide spending has posted its six consecutive month of growth, rising by a total of 0.4 per cent this February according to the Common Wealth Bank’s Business Sales Indicator (BSI).

Although growth was slightly softer than the average 0.7 per cent growth per month over the last half-year, annual growth in spending has now hit 4.7 per cent in seasonally adjusted terms, and 4.8 per cent in trend terms.

The BSI measures spending growth by collating the value of credit and debit card transactions through Commonwealth Bank point-of-sale terminals.

According to Adam Bennett, Executive General Manager, Local Business Banking, Commonwealth Bank, the latest results offer a promising outlook for businesses across the country.

“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,” said Mr Bennett.

Craig James, Chief Economist of the Bank’s broking subsidiary CommSec and author of the BSI, believes the latest results mimic the broadly positive start to the year seen across the economy.

“When we look at annual spending, overall 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, while spending is up 4.7 per cent in annual terms, we know that consumers are still acting with caution and this sentiment will continue to 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. Despite this, we have seen solid annual gains across a range of sectors and states and this is a good news story for many businesses,” said Mr James.