Retail spending dips in May

sluggish economic growthSpending by consumers and businesses has slowed as the federal election edges closer.

Spending fell by 0.1 per cent in May, seasonally adjusted, according to Commonwealth Bank’s business sales indicator (BSI), which draws on data from its own point-of-sale technology.

Annual spending growth slowed from 4.9 per cent to 4.1 per cent in May.

“The May data confirms a slowdown in economy-wide spending as the Australian economy continues its transition after the mining boom, and consumers and businesses await the outcome of the election on July 2,” CommSec chief economist Craig James said.

But he said the fundamentals of the economy remain strong, and the BSI is expected to show a return to growth later in 2016.

Spending fell in only five of 19 sectors in the year to May – vehicles, business services, amusement and entertainment, retail stores and government services, which posted the largest fall, of 1.5 per cent.

Dry cleaners, hairdressers and photographic studios recorded a strong 0.6 per cent rise in spending in trend terms in May.

Falls were recorded in NSW, Victoria and the Northern Territory, and spending rose in the remaining states and territories.
AAP

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