SME Sales Index
SMEs have been among the hardest hit by COVID-19 as government restrictions, job losses, and consumer confidence have all put downward pressure on sales. GetCapital’s SME Sales Index uses transaction data from a representative sample of small and medium enterprises to get deeper insights into the financial and operating performance of SMEs through the COVID-19 period and into the new economic environment.
The return of uncertainty
- The SME Sales Index represents a broad spectrum of business sales activity across the country and works to paint a picture of SME health during the COVID-19 pandemic.
- After heavy falls (30%+) during the early stages of the pandemic, the index bounced back and looked to have normalised at ~20% below pre-crisis figures. However, with the convergence of easing restrictions, EOFY payments, and various government schemes the index briefly jumped back to pre-COVID levels at the end of July.
- Since the EOFY bump, sales have slipped back to ~15-20% below the base level of the index.
Industry impact has not been uniform
- The EOFY bump is heavily pronounced across Construction (up 16%), Manufacturing (up 45%), and Wholesale (up 24%) with a subsequent decline quickly following in the new FY for both Manufacturing and Wholesale. The SME Construction sector continues to defy a COVID turndown as it remains 20%+ up from the end of January.
- The Accommodation and Food sector has seen its recovery tail off with sales declining for five consecutive weeks and currently ~20% down from January.
- The recovery of Fitness and Recreation has also halted. We expected this industry to take the longest to return to January levels given the difficulty of acquiring new customers in the current climate and who may have become used to fulfilling fitness outside of the gym.
Victoria’s economic divergence is taking hold
- Victoria continues to see week-on-week declines with the total index approaching mid-pandemic lows. The decline in sales during the second lockdown is far sharper than the first, but we are yet to see if it is as deep (during lockdown 1, sales declined 21 points in the first six weeks whereas during lockdown 2 they have declined 34 points).
- Victoria’s index continues to trail the rest of the country with a widening gap that is currently 20 points below other states.
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