ANZ today released its monthly Small Business Sales Trends report which showed small business sales increased by 9.0% year on year (y/y) in February 2012, boosted by around 3.5% due to an additional trading day in February. Small business sales growth has now been positive since May 2011.
ANZ General Manager of Small Business Nick Reade said: “Small business sales are starting to show solid growth, with improvements evident across most categories of spending this month, even allowing for the additional trading day in February.
“Non-retail and services sectors were again the standout performers. Business services and trades have been the major contributors, with overall non-retail sales growth over the past year of 11.3% y/y (or around 8% when adjusted for trading day effects).
“While the retail sector achieved sales growth of 5% y/y this month it does remain relatively weak when you take into account the effects of the leap year and additional day of trade which accounts for about 3.5% of the growth.
“Sales in the clothing and fashion sector grew by 3.3%, although when accounting for the leap year effect, sales are flat. However given the well documented struggles clothing and fashion stores have had over the past 6-12 months, we’re hopeful that even flat growth this month means the tide is starting to turn from the negative growth rates seen last year.
“Overall we’re optimistic that small businesses are starting to improve however the sector is not out of the woods yet and we are hopeful that the momentum seen early this year will continue into 2012,” Mr Reade said.
Ivan Colhoun, Head of ANZ Australian Economics and Property Research, said: “Small business sales are looking better in 2012 relative to last year, albeit with the same divergences showing across the states and sectors. Small businesses in NSW and Queensland have been flood affected again this summer, although thankfully not to the extent we saw last year.”
“The pre-Christmas period was disappointing but January and February’s sales growth, even allowing for the leap year effect, might be starting to show the benefits of two RBA rate cuts late last year. The pick-up in small business sales growth in January, which was maintained into February, is consistent with a range of other data indicators that are pointing to a slightly better start to 2012.
“Beneath this improvement, however, we still do see a gap between sales growth of retail-related small businesses and non-retail related ones. Relative to last year, business services and travel and entertainment services were the best performers among the nonretail businesses, while restaurants are continuing to record strong sales growth.
“Across the states, the resources economies of Western Australia, Queensland and the Northern Territory again outperformed the other states. In the other, non-resources states, small business sales growth generally improved, but remained weaker than in the mining-based states with the ACT and Tasmania particularly weak. This divergence between the resources states and non-resources states is a pattern we are seeing in a range of aggregate data, including the ANZ Job Advertisement Series and the ABS Retail Sales data,” Mr Colhoun said.
The data is based on the value of credit, debit and Eftpos transactions processed through ANZ merchant terminals and all 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.