Australians are likely to continue spending in the months ahead, despite a possible dent to confidence from the federal budget.
Economy-wide spending rose 1.6 per cent in April, despite talk of a tough federal budget, the latest seasonally adjusted figures from Commonwealth Bank's Business Sales Indicator (BSI) show.
CommSec chief economist Craig James is confident that spending will continue to strengthen as the year goes on, helped by a recovery in the home construction sector.
"In recent months the baton change from mining investment to home construction and consumer spending has become more tangible," he said.
"The labour market is now showing encouraging signs of turning around, with almost 110,000 jobs being created in the first four months of the year, marking the best start to a calendar year in six years.
"An ongoing lift in employment will be the cornerstone of a further lift in confidence."
But the federal budget could cause a dent in confidence, Mr James said.
"The outlook for the business sector has improved over the past few months however the concerns over the federal budget may have a short-term impact of reducing activity," he said.
CBA's report showed spending was up in 11 of 19 industry sectors, with amusement and entertainment posting the strongest growth.
Sales were weakest in the transportation and vehicle sectors, as well as the clothing sector.
The BSI tracks debit and credit card transactions at CBA's point of sales terminals, which includes purchases made by businesses.
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