Business sales growth slows in Q1 despite a reasonable start to 2014
Growth in sales of Australian businesses slowed to 3.5% y/y in March quarter 2014 from 4.8% y/y in December quarter 2013. Sales were boosted at the end of 2013 by a strong Christmas period, while the later timing of Easter (in April this year versus March in 2013) also weighed on Q1 sales growth.
Business Sales Trends – Highlights
- Business sales growth was 3.5% y/y in Q1 2014, down from 4.8% y/y in Q4 2013.
- Retail-related sales (3.0% y/y) accounted for all of the slowing, with growth in food sales slowing sharply. The strong Christmas period and later timing of Easter this year is likely to have weighed on Q1 food sales growth.
- Excluding food and eating out sales, business sales growth slowed only modestly in Q1.
- Retail sales growth remained very strong at around 10% y/y in the Northern Territory. It slowed in all other states but NSW still recorded solid growth of 4.5% y/y.
- WA and Queensland experienced the weakest sales growth, except for the ACT which essentially recorded no growth.
- Non-retail business sales growth was unchanged at 4% y/y in Q1. Construction services sales led the way, rising 11.5% y/y.
Commenting on the release of the latest quarterly ‘ANZ Business Sales Trends’ report, ANZ General Manager Corporate and Commercial Banking, Victoria and Tasmania, Michael Rose said: “The first quarter figures reveal a reasonable start to 2014, however the key to ongoing business growth in the economy will be to build confidence, particularly through the upcoming federal budget.
“Some pockets of the economy are taking a ‘wait and see’ approach and this could lead to confidence weakening further and risks to consumer spending. Small business is the sector most reactive to market conditions, but as the life blood of the Australian economy, it will be important to ensure we increase our support for entrepreneurship and innovation in Australian business.
“Specifically looking at this quarter's numbers, the softer sales growth was led by the mixed business conditions in the mining states of Western Australia and Queensland. As the resources investment boom continues to unwind, we’re expecting the non-mining states and sectors to pick up the slack.
View full article in PDF.