Sales across Australia rose by 0.3 per cent in trend terms in December, according to the Commonwealth Bank's latest Business Sales Indicator (BSI).

Although many businesses experienced an increase in sales, the rate of growth has narrowed to the slowest rate in just over two years in trend terms, fitting an overall pattern of sales growth in recent months.

Craig James, Chief Economist at the Bank's broking subsidiary CommSec and author of the BSI report, said that although the growth rate slowed further in December, there are encouraging signs that consumer confidence will pick-up in 2015.

"Despite the slowdown in spending growth over the festive period, the latest unemployment data reflects a strengthening employment market, which has the potential to drive spending as we move further into 2015," said Mr James.

"For business owners, the start of the New Year is the opportune time to revisit goals and ensure they are planning ahead for potential variations in spending and proactively managing business cash flow."

The BSI is a key measure of economy-wide spending, tracking the value of credit and debit card transactions processed through Commonwealth Bank point-of-sale terminals.

In annual terms, the BSI grew by 7.7 per cent in December, the slowest growth in 17 months.

INDUSTRY ANALYSIS

Across industries, spending rose in 13 of the 19 sectors in trend terms. The strongest performers in December were Service Providers (up 2.3 per cent); Amusement & Entertainment (up 1.8 per cent); and Hotels & Motels (up 1.4 per cent).

The biggest falls were recorded in Mail Order/Telephone Order Providers (down 4.4 per cent); Business Services (down 3.0 per cent); and Professional Services & Membership Organisations (down 1.0 per cent).

STATE BY STATE ANALYSIS

Strong sales increases were recorded in trend terms in the ACT (up 1.8 per cent), Western Australia (up 0.5 per cent) and Tasmania (up 0.3 per cent), while sales in Queensland remained unchanged.

The trend BSI has risen for 41 straight months in Queensland before its flat result in December, while Tasmania has seen sales rise for 33 consecutive months.

Spending fell significantly in New South Wales (down 1.8 per cent), and contractions were seen in South Australia (down 0.6 per cent), Northern Territory (down 0.5 per cent) and Victoria (down 0.2 per cent).

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