ANZ today released its Small Business Sales Trends monthly report which shows an improvement in June small business sales (up 6.6% higher y/y).
This growth is again led by the non-retail and services sector, and follows last month’s increase in small business sales of 3.1% y/y.
The data is based on the value of credit and Eftpos transactions processed through ANZ systems and ANZ card transactions processed through other systems for businesses at least two years old with annual turnover less than $5 million. ANZ has approximately 20% market share of all card transactions.
ANZ Head of Australian Economics & Property Research, Ivan Colhoun said: “The data suggests trading conditions for small businesses recorded further improvement in June, in contrast to anecdotal evidence of the performance of major retailers in recent months.”
“Last month’s trend of stronger growth in the non-retail and services small business segments continued (+8.0% y/y), compared with those in retail (+4.4% y/y), where clothing and fashion small businesses had another tough month (-0.5% y/y in June).
However, small homewares, furniture, and food businesses appear to have experienced some relief this month (up 5.4% and 8.1% y/y).
“Interestingly, food outlets have shown a healthy growth rate which may reflect some lingering food inflation, since the data shows growth in nominal sales. The same may also be true of small business restaurants, which recorded relatively strong growth in June (+9.4% y/y) and for 2011 to date (+8.8% y/y average).
“The best performing industry segments were again the business services, such as accountants, legal services (+8.8% y/y) and trades (+9.3% y/y). Automotive small businesses also had a good month (+11.4% y/y) although earlier sales disruptions in the automotive supply chain due to the Japanese earthquake may have played a role in this sudden sales spike.
Small hotels and motels also appear to be outperforming the retailers, with relatively higher year to date average growth (3.9% y/y) although anecdotal evidence suggests wide variations across geographies for small accommodation providers at present. “In terms of state-based sales, growth has been stronger in South Australia and Victoria in 2011 to date (+1.9% and +1.6% respectively).
Victoria's performance reflects its relatively stronger population, employment and housing construction rates. Small business sales in Western Australia and Queensland also look to be improving, in line with the recent pick-up in activity more generally in those states.
NSW small businesses appear to have experienced a welcome improvement in sales growth in recent months (June +7.1% y/y) but turnover remains lower for 2011 to date (-0.2% y/y year to date average),” said Mr Colhoun.
Gary Parkin, ANZ State Manager Small Business said: “We’ve now seen two months of consecutive improvement in the small business sector which is an encouraging sign for an industry which has been feeling the pinch for a while now. “The data provides great insight into the nature of growth and there continues to be signs that retail is still lagging, particularly with more spending now happening on nonretail, services and food. While the growth improvement does give us hope, we need to be watchful for how it will play out over the second half of the year.”
“Our focus in ANZ small business is on supporting our customers through the cyclical nature of the economy and making sure their businesses are sustainable and can navigate their way through,” said Mr Parkin.