Consumers appear more willing to pull out their wallets and spend again, just in time for Christmas.

Economy-wide spending in the month of October rose 4.1 per cent, after a 1.4 per cent decline in September, according to the Commonwealth Bank’s Business Sales Indicator (BSI).

Spending was up 10.7 per cent in the 12 months to October, seasonally adjusted, compared to 5.6 per cent in the year to September.

Businesses should be in for a good Christmas with consumers ready to spend more, CBA local business banking general manager Adam Bennett said.

“With consumer confidence improving and property values rising strongly, the outlook for household spending is looking increasingly healthy,” Bennett said.

“That’s good news for retailers, especially with the critical holiday trading period just around the corner.”

CommSec chief economist Craig James said a steady unemployment rate and rising housing prices were helping to support spending growth.

“There has been continued focus on rising property prices and high auction clearance rates in some capital cities, which can have the effect of boosting consumer confidence and spending,” he said.

“Home owners are continuing to enjoy the benefits of record low interest rates.”

James acknowledged that business confidence had dropped since its post-election bump, but continuing low interest rates and rising consumer confidence should help improve business conditions.

The Reserve Bank of Australia’s cash rate is currently at a record low of 2.5 per cent, after the bank reduced it by quarter of a percentage point in May and again in August.

The BSI tracks debit and credit card transactions at CBA’s point of sales terminals.

AAP