Conditions looking more positive for Australian businesses despite Queensland leading a national drop in sales growth last month
December 20, 2010
Conditions are looking more positive for Australian businesses as 2010 draws to a close despite Queensland leading a national drop in sales growth last month.
The latest Commonwealth Bank Business Sales Indicator (BSI) released today was down 0.1 percent in November, while Queensland was down by 0.6 percent.
The BSI, which tracks the value of credit and debit card transactions processed through Commonwealth Bank point-of-sale terminals, fell for the 12th straight month in November.
However, it also revealed that weakness was concentrated in a small number of industry sectors.
According to Local Business Banking Executive General Manager Matt Comyn, the latest findings show that there are good grounds for optimism heading into the New Year.
“We’ve seen the size of the declines recorded by the BSI consistently narrowing over the past six months,” Comyn says.
“Encouragingly, the 0.1 percent fall in November was the smallest decline recorded in 2010, something that is positive news for retailers,” he says.
CommSec Chief Economist and author of the BSI, Craig James, says another source of encouragement in the latest data is the fact that the majority of industry sectors recorded spending growth in trend terms.
“In trend terms, the value of spending transactions fell in only six of the 20 industries in November,” James says.
He says there are some standout performers among the sectors, with retail stores recording the strongest growth rates in 14 months, up by 0.9 percent.
“In addition, a raft of other sectors are also showing improving growth trends, including the 0.4 percent trend growth at clothing stores which was the best reading in 19 months,” James adds.
INDUSTRY ANALYSIS
Across the industry sectors, miscellaneous stores (up 1.1 percent) recorded the strongest monthly gain followed by professional services and membership organisations (both up 1 percent) and amusement & entertainment and retail stores (both up by 0.9 percent).
The weakest sectors in November in trend terms were wholesale distributors & manufacturers and mail order & telephone order providers (both down 0.3 percent), with the latter sector also the weakest performer on an annual basis, down 18.3 percent on a year earlier.
Hotels and motels also slipped in November, down by 0.2 percent.
While six sectors contracted in the latest month, the size of the declines in all cases was very modest.
Personal service providers (which includes laundries, hairdressers, shoe repair shops and tax agents) remained the star performer in annual terms, continuing its positive trajectory from October and now up 8.2 percent on a year ago.
According to James,
today’s BSI shows there is now light at the end of the tunnel for Australian retailers.
“All eyes will be on the sector to see if the festive season brings with it some much needed cheer as we move into the New Year,” he says.