Australian businesses have been keener to spend in the immediate aftermath of the May federal budget announcement, the latest Commonwealth Bank Business Sales Indicator (BSI) reveals.
The group found that spending levels hit their highest growth rate in three years, increasing 0.8 per cent from the previous month. The most impressive figures are seen on an annual basis, where growth has stood at 7.5 per cent – that’s 2.2 per cent higher than the decade average.
Executive General Manager of Local Business Banking Claire Roberts explained that confidence finally seems to be returning to the market. This may give companies the impetus they need to expand their operations and invest in new technology such as database software.
“The growth experienced by a number of industry sectors in May also suggests that businesses are responding to the stimulus measures in the latest federal budget, like new tax breaks for small businesses,” Ms Roberts noted.
Government services was one of the strongest sectors throughout May, as sales growth marked a 3.1 per cent rise. Amusement and entertainment, as well as business services, were also identified as standout performers.
Sales growth was the strongest in South Australia, followed by Victoria and the ACT. In trend terms, the BSI has increased for 47 consecutive months in Queensland, 39 in Tasmania, and for 12 months in both the ACT and Western Australia.
The positive impact of the federal budget was also identified in the NAB Monthly Business Survey for May, which showed that confidence improved in the wake of the announcement. The index increased from three to seven points, bringing confidence levels to their highest since August last year.
Business conditions also improved over the period in question, with service sectors in particular found to have been performing well during the past few weeks.