Small business sales were up in October, suggesting that consumer spending will creep back in the lead up to Christmas, according to the latest figures from ANZ.
The ANZ Small Busineses Sales Trend report showed small business sales grew 2.8 percent last month, making it the sixth consecutive month of positive annual growth.
ANZ general manager small business, Nice Reade praised the recent performances of SMBs.
“It’s pleasing to see that overall small businesses have posted another modest increase in sales this month, as it’s no secret that for a while now small businesses have been doing it tough.”
Retailers are still struggling though, with the service and trades sectors continuing to outperform them.
“We’re still seeing retail-related small businesses, such as clothing and fashion outlets, continuing to face weak conditions,” said Reade.
Retail-related turnover experienced an increase of just 0.6 percent compared with 4.2 percent for non-retail services. The automative, trade and business services, consistent with the trends of the past few months, once again showed the best growth rates, with the number one spot going to Restaurants, which experienced 8.9 percent growth rate year-on-year and 9 percent growth overall.
Following the RBA interest rate cut earlier this month, and a slight comeback in consumer spending, Reade predicts business conditions will slowly start improving as shoppers gearing up for the Christmas trading period.
“Despite these mixed conditions, we’re hopeful that there’s a glimmer of hope on the horizon for our small business customers,” said Reade.
ANZ head of Australian economics and property research, Ivan Colhoun, said: “The data this month shows slightly weaker growth (in annual terms) than in September and August, but the positive momentum has been maintained.” Across the board, year to date sales growth remained relatively weak in October.
Nationally, NSW and Queensland sales growth appeared to be strengthening, up 4.3 percent year-on-year and 5.3 percent respectively.
Coulhan said this was good news for Queensland in particular, which “has been slow to recover from the devastating effects of last summer’s floods and cyclone Yasi. We know that Queensland’s tourism activity remains soft, but clearly some other types of small businesses are beginning to improve again in Queensland.”