Australian businesses are experiencing another decline in retail spending as fickle consumers hold on to their money after two months of opening their wallets.
The Commonwealth Bank business sales indicator posted a 5.4 per cent fall in July in seasonally adjusted terms, reversing gains of 3.1 per cent in June and 1.7 per cent in May.
The BSI tracks the value of credit and debit card transactions processed through Commonwealth Bank point-of-sale terminals which account for about 30 per cent of the national market.
The index found that five of the industry sectors fell in July in trend terms, with NSW and Victoria recording the weakest sales growth.
Commonwealth Bank acting 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 following some good economic announcements.
"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," Mr McGrath said.
In annual terms 20 sectors contracted in July, with the weakest sectors being airlines, hotels and motels.At the opposite end of the scale wholesale distributors and manufacturers grew by 27 per cent while mail-order and telephone providers rose by 26 per cent.
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