Low interest rates and the falling Australian dollar are lifting confidence, encouraging consumers to spend more money.
Spending rose 3.9 per cent over 2013, according to the new ANZ quarterly Business Sales Trends report.
Low interest rates and the lower currency were providing businesses with a tailwind for growth, ANZ corporate and commercial banking managing director Mark Whelan said.
“The general mood in the market is improving, we’re a lot more optimistic than what we have been since the global financial crisis and we think that’s likely to continue,” Mr Whelan said.
“The economy is definitely adjusting from the post-mining boom and we are seeing growth in other parts of the economy which is reflected in the sales activity.
“It appears as if the economy is really starting to shift away from that mining sector.
“The low interest rate environment has been really positive for consumer confidence and that’s been driving growth in areas such as property and property construction which is reflected in the sales data and in business confidence across the board.”
The pickup was strongest among small business, Mr Whelan said, with stronger consumer sales and lending growth, which is a good sign for employment.
Investment was also picking up at the top end and while the middle market remains subdued, there are green shoots there as well, he said.
ANZ head of Australian economics Justin Fabo said the retail sector outperformed the non-retail sector in the December quarter, possibly reflecting the Australian dollar’s 20 per cent fall since April which encourages people to shop locally rather than online.
Low interest rates have also boosted household income, he said.
“The benefit of the lower currency to the transport, accommodation and recreation sector appears to be taking some time, with sales remaining weak, however we expect this to turn around in the near future,” he said.
Mr Whelan said tourism was also getting a boost from the lower Australian dollar.
ANZ quarterly Business Sales Trends report is based on data from credit, debit and Eftpos transactions processed through ANZ merchant terminals, which are not adjusted for inflation, seasonality or ANZ market share.
