June business spending highlights growth

Spending in both the consumer and business sectors are up.

Spending in both the consumer and business sectors are up.

For businesses of all scopes and sizes to grow, there needs to be the confidence of other enterprises to invest in products and services.

With this thought in mind, it is pleasing to report the figures out of the latest Commonwealth Bank Business Sales Indicator (BSI). According to the statistics, sales in the Business Services category improved 2 per cent in June, with nationwide spending also improving in the same time period by 0.7 per cent.

Executive General Manager Claire Roberts explained that these figures highlights that the Australia business world is moving through a period of positive growth.

"June's BSI provides a solid indication that now is a promising time for Australian businesses. Sales figures continue to reach record highs with businesses and consumers more confident about the economic outlook," she said.

"A combination of low interest rates and reduced unemployment has resulted in a positive end to the 2014-15 financial year and businesses should be optimistic about what the next 12 months will bring."

However, it isn't just B2B sales improving, economy-wide figures also improved for the fourth straight month according to the bank. In June, these figures grew 7.6 per cent which is the fastest rate this year.

Chief Economist at CommSec Craig James described this encouraging trend. 

"Despite recent global economic uncertainties such as the Greek debt crisis and China's slowing economy reducing demand for Australian resources, it's encouraging to see businesses and consumers embrace low interest rates and government stimulus, with spending growing at a steady pace," he said. 

Consumer confidence

These figures correlate well with the recently released ANZ-Roy Morgan Consumer Confidence survey. Based on the thoughts of Australian public, this rate improved 4.5 per cent in the week of July 21 to reach 111.8 points. 

This rate cancels out the poor rate in recent weeks and months and was likely caused by the Greece economic resolution. 

Industry experts warn that this level could change in the times ahead due to the slowing Australian mining industry and possible upcoming changes to GST law. There are also concerns about taxes in several states as well.

Cashflow key

Given the importance of corporate and consumer spending to growth, now is the time for enterprises to ensure their debt collection and cashflow processes are set in place. By working with a professional credit service, business leaders can ensure their company continues to expand even through the slow times.

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