Australian Business sales rise

20 July 2012 00:00 - Phoebe Robinson

Australian Business sales rise

The Commonwealth Bank of Australia has indicted that business sales rose 2.5% in June; this was after an upwardly revised 2.1% increase the month before.  That left it 10.1%up on June last year; this was the fastest annual growth in over four years.  Furthermore data suggests that the forthcoming official retail sales report for June could also be a surprise for the good, this prediction comes after an unexpectedly firm reading in May.  These results it seems owe much to the Reserve Bank of Australia who in May and June cut rates along with handouts from the government to offset a carbon tax. 

"It appears the stimulus provided by the RBA's back-to-back rate cuts, and the Federal Government's household assistance package, has provided a sizeable boost to economy-wide spending," said Craig James, chief economist at CommSec.

Moreover the Australian opposition leader has been praising the Australian economy, he said "Obviously we have some fundamental strengths in Australia. We have an abundance of natural
resources, we have a stable political system and we have talented and creative people. Obviously there are some questions about government policy (but) I haven't been here to fight the political battles of back home on the streets of New York.”

However Tony Abbot the opposition leader did criticise Gillard’s government’s economic management, he said it was important for the nation to live within its means and boost productivity.

Furthermore Australian businesses grew less optimistic about near-term prospects, this has signalled a slowdown in the fastest growing developed economy that economists predict will force the central bank to cut interest rates one more time. The business conditions index for the next few months dropped to 5, this is the lowest reading since the second quarter of 2009, the National Australia Bank (NAB) announced in a survey released today.