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Weakest spending since GFC

More people have jobs and job security is stronger, but consumer spending is the weakest since the height of the global downturn, according to a report.

The Commonwealth Bank Business Sales Indicator (BSI) fell by 0.3 per cent in trend terms in June after a similar decline in May.

The results over the last four months are the worst since early 2008, at the height of the global financial crisis.

CommSec chief economist Craig James, who authored the BSI report, said higher interest rates, lingering concerns about the global economy and rising utility charges and council rates were worrying consumers.

"While we are hopeful about a lift in spending later in the year, future Reserve Bank (of Australia) rate decisions will be pivotal," Mr James wrote in the report on Tuesday.

"Consumers feel as (if) they are under siege at present and they need a period of interest rate stability so they can focus on both the positive and negative influences on the household budget."

Over the past year the BSI has risen just 0.7 per cent in trend terms, the slowest growth in 17 months.

The trend pace of growth has consistently slowed over the past seven months, exactly tracking the slowdown in the Australian Bureau of Statistics retail trade series, Mr James said.

The weakest sectors in June in trend terms were mail order and telephone order providers, automobiles and vehicles and retail stores.

In annual terms, the sectors with the strongest gains in June were service providers, amusement and entertainment and personal service providers.

Five of the eight states and territories recorded negative monthly trend growth in June.

Leading the way was Tasmania, followed by Queensland, NSW, South Australia and Victoria.

Spending was flat in the ACT and spending was up 0.2 per cent in Northern Territory and up 0.4 per cent in Western Australia.

The Commonwealth BSI is obtained by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: ACT, Australian Bureau of Statistics, Commonwealth Bank, CommSec, mobiles

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