Business sales contract for first time in three months
(24 August 2012 – Australia) Economy-wide spending slumped in July according to Commonwealth Bank of Australia (CBA)’s latest Business Sales Indicator (BSI).
Tracking the value of credit and debit card transactions processed through CBA point-of-sale terminals, a sample of approximately 30 percent of the Australian market showed the BSI fell by 5.4 percent in seasonally adjusted terms.
CBA acting executive general manager for Local Business Banking, Gary McGrath, said the latest figures were a disappointing result for Australian businesses which had been witnessing sustained levels of positive spending performance.
"It’s definitely a blow to businesses which, in the past couple of months in particular, had been the beneficiaries of greater levels of consumer spending thanks to a number of positive economic announcements," said McGrath.
"The turnaround we have witnessed here simply reinforces the consumer we are dealing with today; that is, one who is far more cautious when it comes to how they spend their money and who is quite happy to hold on to their cash.
"It is clear that whilst favourable market events such as stimulus measures can provide a welcome boost to spending, the underlying consumer attitude is not going to change overnight or even in a matter of months.
"To achieve a longer-term behavioural shift we will need to see continued positive news and on a much larger scale."
CBA acting executive general manager for Local Business Banking, Gary McGrath, said the latest figures were a disappointing result for Australian businesses which had been witnessing sustained levels of positive spending performance.
"It’s definitely a blow to businesses which, in the past couple of months in particular, had been the beneficiaries of greater levels of consumer spending thanks to a number of positive economic announcements," said McGrath.
"The turnaround we have witnessed here simply reinforces the consumer we are dealing with today; that is, one who is far more cautious when it comes to how they spend their money and who is quite happy to hold on to their cash.
"It is clear that whilst favourable market events such as stimulus measures can provide a welcome boost to spending, the underlying consumer attitude is not going to change overnight or even in a matter of months.
"To achieve a longer-term behavioural shift we will need to see continued positive news and on a much larger scale."
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