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Spending up for 7th month in a row

Spending up for 7th month in a row

(22 April 2013 – Australia) Businesses have continued to benefit from an improvement in consumer spending with sales up for the seventh straight month in March, according to a new source.

According to the source, spending increased at a slower pace across March, lifting by 0.4 percent in trend terms following a rise of 0.7 percent in February.

This was the smallest gain in trend terms recorded by the source over the past six months and takes the annual growth rate to 4.9 percent in trend terms.

In seasonally adjusted terms, a measure which tends to be more volatile, spending grew by 1.3 percent in March, following an increase of 0.3 percent in February and 2.1 percent lift in January.

Annual growth now stands at 5.8 percent in seasonally adjusted terms.

The source said that despite the modest slowdown in the growth rate in March, the continued upward trajectory in spending patterns paint an encouraging picture for businesses across the country.

"Although March saw the smallest gain in spending in six months, consumers are continuing to open their wallets and this should be taken as a positive sign for businesses. Consumer spending has increased for seven straight months now and businesses should take this a strong indication that consumers are willing to spend on a consistent basis."

"That said, not all industry sectors experienced sales growth in March. Whilst Service Providers and Professional Services performed well last month, Mail Order/Telephone Order Providers and Business Services experienced a drop in sales," the source added.

The source believes the latest results show consumer confidence is starting to gain momentum.

"As March marks the seventh consecutive monthly increase in spending, we’re starting to see that consumers are becoming more confident and responding with increased spending. This is largely reflective of an overall positive outlook for the economy, which was reflected in the Reserve Bank’s decision to hold the cash rate steady in both March and April."

"With economic growth expected to be somewhat subdued over the next 12 months, businesses should remain confident but cautious, and prepare for potential fluctuations. However, the majority of business sectors continue to enjoy consistent growth and this month’s results should be seen as a positive sign for most Aussie businesses," the source said.

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