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 (~25%+) 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 June.
- Since the EOFY bump, sales have slipped back to a ‘new-normal’ range ~20% below levels at the start of the year.
Industry impact has not been uniform
- The impact, much like the expected recovery, has not been uniform across industries. Data suggests the recovery will 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 ~40%+ 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’s economic divergence is taking hold
- Victoria continues to experience week-on-week declines as the index falls below the lowest levels of the first lock-down period. The index has now dropped ~40% from its EOFY peak, just before the second lock-down came into effect.
- Victoria’s index continues to trail the rest of the country, but with a narrowing gap currently 15 points below other states.
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