Treasurer Scott Morrison will reveal this evening just how long it will take Australia to return to a budget surplus, but signs are already pointing to increased business confidence as SMEs pull ahead of corporate peers in some sectors.
The NAB Monthly Business Survey for April revealed on Monday its business conditions index had risen two points for the month, with chief economist Alan Oster observing confidence in the overall conditions were “quite a bit stronger than expected”.
Queensland was expected to lead to a weakening of conditions after Cyclone Debbie, but across the board, growth was stronger than anticipated.
The transport sector drove some of the improved conditions for April, and while “retail is still a concerning exception” to growth overall, improvements in the space in April were heartening, Oster said. This observation echoes the opinions of smaller retailers SmartCompany has spoken to over the past month, who have been quick to welcome international competitors like Amazon even as they have watched some local brands collapse into voluntary administration this year.
The government continues to highlight workforce participation as a priority, with new welfare measures expected in tonight’s federal budget to curb those improperly using Centrelink benefits. However, recent surveys of job numbers suggest the country could be in for a sustained period of improved participation. ANZ’s monthly job ads survey showed a 1.4% increase in the number of job ads for the month of March, while ANZ head of Australian economics David Plank says the gap has not officially closed yet between official ABS jobs data and survey-based methods of analysing participation in employment.
“In our view, employment is likely to show further strength over the coming months to close this gap. In time this should be reflected in a pick-up in wage growth,” he says.
Small business owners have reported this week that while they support tax concessions for SMEs in tonight’s budget, job creation and participation measures are also a top priority. This includes measures to support families and working mothers to get back into the workforce.
“It is not always practical for a self-employed mother to down tools for 18 weeks straight before stepping back to her business,” co-founder of online bike parts business Mountain Bike Direct, Jen Geale, told SmartCompany on Monday.
The challenging retail environment continues to be a top concern, with retail experts recently observing the collapse of local stalwarts like Victoria Station shows many brands are now getting a “kick” from the world of online retail.
However, figures from NAB out this week suggest toys, groceries, liquor and electronic gaming are driving growth in the country’s online retail space, which is now worth more than $22 billion a year.
Australian online retail sales grew 0.8% in the month of March, taking the annual growth rate to nine percent for the year. However, the smaller end of the spectrum is where things are really powering forward, with online-focused SMEs posting a 4.1% growth in sales in March, taking this cohort to 23% growth for the year.
Associate Professor at Queensland University of Technology Gary Mortimer has previously told SmartCompany that despite growth and interest in the space, the slice of online sales from Aussie consumers remains very small.
A note from NAB’s Alan Oster on online sales observes that growth has slowed significantly since online retail started being tracked by the bank in 2011, but some sectors in particular continued to power on.
These include the media category, which accounts for 17% of all spending and grew by 12% over the past year, and grocery sales, which now account for 16.7% of sales across the country.
However, department stores continue to struggle, dropping 0.2% in March 2017, and still accounting for less than 10% of overall spending.
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