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.
- This jump was short-lived and seems to have been linked to EOFY. Since EOFY, the index has dropped over 20% and been adversely impacted by the increased restrictions in Victoria.
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 sectors have halted their recoveries (down ~40% on the end of July) with increases in the number of COVID cases adding to the reluctance of consumers to eat out or make holiday bookings.
- Gyms continue to recover, in part driven by their membership-based business model, the resumption of fees and latent demand.
Victoria’s economic divergence is taking hold
- In Victoria, which didn’t benefit from the EOFY bump as much as other states, the second wave of restrictions and lockdowns is starting to have a dramatic economic impact.
- Victoria’s index is currently 14 points below the rest of Australia and could continue to slip with the lock-down of all non- essential businesses.
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