The effects of subdued consumer confidence are beginning to spread beyond the retail sector into a wider set of businesses, according to Commonwealth Bank (ASX:CBA).
Business sales deteriorated further during July, Commonwealth Bank said, with its Business Sales Indicator (BSI) declining 0.3%.
The BSI, which is calculated based on the value of credit and debit card transactions at the bank's POS terminals, had also fallen 0.5% in June.
Declines were registered in trend terms across five states and territories last month, with the weakest results recorded in NSW, followed by Queensland and South Australia. Sales in Queensland have consistently fallen for the past 23 months, the research shows.
Even in the ACT, the strongest performer, overall sales grew just 0.2%. NT and Victoria both gained 0.1%.
Eight industry sectors contracted in July, but interestingly, the retail sector itself actually saw a 0.1% increase.
CBA's executive general manager of local business banking, Matt Comyn, said the overall slump is a sign “of a broader fallout from continued subdued trading conditions.”
He said the business sales weakness is likely to continue until sentiment in the local economy improves.
CommSec chief economist Craig James agrees that there's no sign of reprieve on the horizon.
“There have been no clear indications of a turnaround in spending and no doubt the recent volatility seen in local and global markets will also be preying on consumers’ minds,” he said.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.