CBA: Best reading for over a year for Aussie credit and debit transactions
The Commonwealth Bank Business Sales Indicator was largely unchanged in trend terms throughout December, it has been revealed.
It is positive news for retailers in Australia as the BSI tracks the value of Aussie credit and debit transactions through the financial organisation's point-of-sale terminals.
The result was mainly unchanged in trend terms but there was good news for firms.
Craig James, chief economist of the bank's broking subsidiary CommSec and author of the BSI, pointed out this result was particularly positive because there was some activity in New South Wales and Queensland in December.
He said: "While growth in economy-wide spending remains elusive, the good news is that the majority of industry sectors are still expanding rather than contracting."
What's more, Mr James stated December 2009 saw the BSI decrease in terms of a trend basis, while executive general manager of local business banking at the CBA Matt Comyn noted Retail Stores has now experienced its fourth consecutive rise as it increased by 0.5 per cent in December.
He added: "We must also remain mindful of the impact of the recent flooding on small businesses operating in affected communities across Australia."
And this natural disaster has led many financial organisations to pledge money to flood relief, as well as produce emergency packages for those affected.
Some of services provided by the banks have included extensions to credit card limits, as well as waiving charges on the withdrawal of term deposits.
Mr Comyn stated: "There will undoubtedly be negative short-term effects on business activity including continuing supply-chain disruptions and a tightening on cashflow."
This comes after the CBA revealed in December there were positive signs for companies, despite continued negative spending growth in its last BSI.
It fell for the 12th month in a row in November, but Mr Comyn pointed out the declines recorded by the BSI had been getting lower.
Meanwhile, the floods in Queensland are one reason for RBA's decision, it has revealed.
The Reserve Bank of Australia (RBA) has opted to maintain the interest rate at 4.75 per cent for February.
This news should be welcomed by homeowners across Australia and particularly those experiencing difficulty due to the floods in Queensland and parts of Victoria.
And the natural disaster played a part in the minds of the RBA, who stated the "temporary adverse effect" of the issue, along with low inflation, were two reasons why the organisation opted to maintain the cash level.
What's more, this comes after the RBA chose to keep rates the same over the Christmas period and for the whole of December.
However, the last cash level rise came in November when the rate increased by 0.25 per cent from 4.5 per cent to 4.75 per cent, which lead the Commonwealth Bank to up the levels on its home loan and savings accounts, much to the dismay of homeowners in the country.
Talking about the floods in Australia, RBA governor Glenn Stevens said in a statement this week (February 1st): "Over the next year or two, the efforts to repair or replace infrastructure and housing will add modestly to aggregate demand, compared with what would otherwise likely have occurred.
"The extent of this net additional effect will depend on the full extent of the damage, the speed of the rebuilding and the extent to which other public and private spending is deferred."
In addition to this, he pointed out it was important for the bank to assess whether the demand from rebuilding after the natural disaster will have a big impact on the medium-term outlook for inflation.
Earlier in the statement, Mr Stevens revealed the RBA expects inflation throughout the year ahead to be between the two to three per cent target, also stating a further increase in employment growth is likely over the coming year.
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