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.
Slow but steady progress
- 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 seems to be leveling out at ~5-10% below base level. The journey has been bumpy but the index has rebounded strongly as a result of government and private stimulus and EOFY.
- However, since the start of FY21, the restrictions in Victoria and subsequent impact on industry performance there has had an overall negative effect on sales, weighing down the index.
Signs of a K-shaped recovery
- The impact, much like the expected recovery, has not been uniform across industries. Data suggests the recovery could be K-shaped with a divergence based on business quality and responsiveness.
- The EOFY bump was heavily pronounced across Construction, Manufacturing and Wholesale 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 ~25%+ up from the end of January, while Manufacturing joins Fitness and Recreation at the other end of the spectrum, at ~40% below the start of the year.
Victoria emerges from second lockdown
- Victoria has turned a corner with a sustained improvement in its index. This is a positive development and with the easing of restrictions should hopefully be followed by a strong rebound.
- The gap between Victoria and the rest of the country has fallen to 5 points after maxing out at ~25 points between August and September.
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