Growth in small business sales led by mining states and pick-up in NSW
Small Business Sales Trends report – Highlights
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ANZ today released its Small Business Sales Trends report for July which showed that small business sales rose by 4.9% y/y in July and by 3.8% over the year to the three months to July.
Sales growth remained divergent across the states in July, but there was an improvement in New South Wales following several months of weak growth. Sales growth remained strong in the mining states of Western Australia and the Northern Territory, and to a lesser extent Queensland.
The recent trends in sales growth by type of business also continued in July, with business services and food-related small businesses showing stronger sales figures than the retailers selling clothing and fashion, homewares and furniture, and appliances and electrical.
ANZ General Manager of Small Business, Nick Reade, said: “Overall small business sales growth appears to have improved in recent months, with encouraging signs particularly seen in New South Wales, with sales up 4.2% year-on-year for the three months to July, and 5.7% for the month compared to July last year.
“Anecdotally we’re also hearing positive reports coming from our small business customers in New South Wales which supports the solid growth in the sales data.
“With this pick-up in activity in New South Wales, along with solid growth improvements across the board with overall sales up by 4.9% year-on-year in July, we’re hopeful that confidence is rebuilding in some areas, and may continue into the remainder of the year,” Mr Reade said.
ANZ Senior Economist, Justin Fabo, said: “Growth in small business sales looks to have improved in recent months, with sales nationally likely to have been boosted by the Federal Government’s $2.8 billion payments to households over the six weeks to the end of June, including part of the carbon tax compensation and the Schoolkids Bonus. Sales growth may also have been supported by lower interest rates since late 2011. For these reasons, it is still too early to tell whether the recent increase in small business sales growth will persist.
“The divergence between trading conditions in the non-food retail sector and other industries persisted in July. In part this reflects that retailers’ sales have been most affected by the persistently high Australian dollar, which has adversely affected margins for many businesses. In contrast, sales growth in automotive businesses has picked up, which is in line with stronger motor vehicle sales in recent months, and has remained strong for services-related businesses.
“The effect of the strong currency can also be seen in the divergent sales performance at the state level. Sales growth in Victoria, South Australia and Tasmania has been relatively weaker than in most other states. This partly reflects that the high Australian dollar is leading to relatively greater structural adjustments in these states’ economies, with Tasmania’s important tourism industry also adversely affected,” Mr Fabo said.