(Australian Associated Press)
Spending across the economy has grown at its fastest rate in seven years in the lead-up to Christmas, with economists hopeful the surge signals a profitable festive season for retailers.
The Commonwealth Bank’s Business Sales Indicator rose 1.2 per cent in trend terms in November, while the previous month’s result was also revised upwards from 0.4 per cent to 1.1 per cent.
The BSI measures the value of credit and debit card transactions processed through the bank’s merchant facilities.
CommSec senior economist Sevanth Sebastian said spending had clearly bounced back from the uncertainty of the Brexit vote and the US and federal elections.
He said the figures indicated the 0.5 per cent slump in September quarter gross domestic product, reported earlier this month, was likely to be a minor blip on the radar.
“The Australian economy is in good shape, consumers are confident, and the outlook for 2017 remains bright, Mr Sebastian said.
“It’s unlikely that we will be heading for a second GDP dip and a technical recession.”
He also noted that figures were good news for retailers in the lead up to Christmas.
“The Christmas period is upon us and there are signs that retail spending has lifted in the last few weeks, a positive sign for Australian businesses leading into the New Year,” Mr Sebastian said.
Spending rose across 16 of 19 government sectors in November, led by a 4.5 per cent rise in government services spending and 3.6 per cent rise in amusement and entertainment.
Across states and territories spending was also up in the month, with NSW recording the strongest monthly rise of 1.8 per cent.