Small Business Sales Trends – Highlights
- Small business sales increased by 2.5% y/y in March 2012 and by 4.8% on a YTD basis.
- Adjusting for monthly volatility and February’s extra trading day, YTD small business sales growth was approx 3.5% y/y. This is a moderate improvement on 2011’s average growth rate.
- Divergences in sales growth between the resources and non-resources states remains very evident, with WA (+7.4%), NT (+7.2%), and QLD (+5.6%) again showing the strongest YTD growth rates.
- Non-retail small business sales increased by 2.9% y/y in March, which is softer than the growth rate this sector has seen over the last few months.
- Overall, growth remains relatively soft in the retail sector (+1.8% y/y).
- Service-related businesses continue to retain their relatively strong growth rates, with restaurants up 8.7% y/y and hotels and motels up 7.0% y/y.
- Regional and rural small businesses continue to slightly outperform metro businesses, although the gap appears to be narrowing.
ANZ today released its monthly Small Business Sales Trends report which showed small business sales increased by 2.5% year-on-year (y/y) in March 2012. While growth was generally positive across most of the sectors and states, the data once again revealed that some areas are performing better than others.
ANZ General Manager of Small Business Nick Reade said: “Overall, small businesses are continuing to record positive sales growth, and total sales have now been positive since May 2011. Unfortunately there are some areas in particular that are still not growing as strongly as we would like.”
“The March figures confirmed themes that we have been seeing for a while now. For example the non-retail and services sectors continue their moderate growth, up 2.9% year-on-year.
“Interestingly, the trades sector which had been growing strongly in recent months only grew by 0.8% year-on-year in March. This slight slow down in growth is also confirmed by what we’ve been hearing from our customers in this sector, and we’re working closely with them to ensure they’re fully supported to manage their cash flow through this flat patch.
“While the non-retail industries again outperformed their retail counterparts for the month, up 6.3% compared with 2.4%, retail on the whole is seeing modest improvements and we’re hopeful it may be building momentum.
“Overall we remain optimistic about the outlook for small businesses in Australia. They’re continuing to record positive growth in aggregate terms and we expect this momentum to continue into the year,” Mr Reade said.
Ivan Colhoun, Head of ANZ Australian Economics and Property Research said: “There appears to be modest improvements in small business sales growth across most states. However, divergences between the resources and non-resources economies remain very evident. Western Australian, Northern Territory and Queensland continue to record much stronger growth rates, and this fits with Australia’s macro story: we are seeing this multi- speed story in a range of other indicators, including the ANZ Job Advertisement Series and the ABS Employment and Retail Sales data.”
“The disparity in growth rates also extends to sectors within small business sales. The retail sector continues to show relative flat growth in its sales figures, increasing by 2.4% year-to-date in March, compared to growth of 6.3% year-to-date in the non-retail related sectors.
“As has been seen over the past six months, appliances and electrical and home-wares and furniture continue to record negative year-on-year growth. Clothing and fashion, although positive, was also relatively weak. These sectors have been affected by heightened consumer caution, as well as price deflation in their respective categories. In contrast, sales in service-related sectors such as restaurants, hotels and motels remain relatively strong, each recording in excess of 7% for year-on-year growth rates.
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.