ANZ today released its Small Business Sales Trends report for August which showed that small business sales rose by 4.7% year on year in August and by 3.2% over the year to the three months to August.
Sales in automotive small businesses, which includes car services, accessories and maintenance is growing strongly, while traditional retailers continue to face soft conditions.
By state, small businesses in Western Australia continued to experience the most favourable trading conditions, while sales growth in New South Wales has shown tentative signs of improvement.
Nick Reade, ANZ General Manager Small Business, said: “This month’s sales figures confirm a couple of trends we’ve been seeing recently, the first of which is strong growth in the automotive sector, which was up 6.6 per cent year-on-year for the three months to August.
“Supporting this data is the strong volume growth we’re seeing in our asset finance group in small business, which has grown by 23 per cent this year, compared with overall business credit growth of around 4 per cent.
“Another trend we’re observing is the softening of sales in trades and business services which have performed strongly over the last 12 months, and the slight uplift in overall retail-related sales. Although retail sales growth does remain relatively flat, up only 1.7 per cent year-on-year for the three months to August, there have been some recent encouraging signs. According to the increasing number of retailers now starting to enter into and maintain arrangements to clear their overdrafts with us, it could suggest business confidence in this sector has improved a little and we look forward to seeing this play out over the coming months,” Mr Reade said.
Justin Fabo, ANZ Senior Economist said: "Overall, growth in small business sales remains relatively soft but there are signs that some areas are starting to improve. Retail-related businesses have seen a modest improvement in sales growth in recent months, which follows a period of weak non-food retail sales growth due to changing consumer spending patterns and a rising Australian dollar which has encouraged more spending and travel by Australians overseas.
“Automotive businesses recorded very strong sales growth, continuing the trend of recent months, and this is in line with robust motor vehicle sales in Australia. Looking forward, however, motor vehicle sales growth is expected to slow from its current fast rate.
“Across the states, Western Australia’s small business sales continued to stand out, which reflects the significant benefits from sharply higher resources investment and associated flow-on effect. Sales growth in New South Wales has improved somewhat in recent months, and remained solid in the other resources states of the Northern Territory and Queensland. There are some clouds on the horizon for sales growth however, with sharp falls in commodity prices and pressures on government finances expected to hamper growth in household incomes and spending. In particular, we will be looking for any signs of a softening in the resources states of Queensland and Western Australia in coming months,” Mr Fabo said.