After a period of decline, July brought a change in business turnover for most Australian industries, according to new figures from the Australian Bureau of Statistics (ABS). This change, though modest, was enough to signal a recovery in several sectors, especially those hit hardest in the preceding months.
The seasonally adjusted data shows a 1.0 per cent increase in business turnover, a positive shift following two months of consecutive declines. This improvement offers a sense of stability in an economy that has experienced various disruptions across different sectors in the first half of the year.
Leading the charge in July was the Transport, Postal, and Warehousing industry, which posted the largest increase of 4.0 per cent. This rise comes after a 3.3 per cent drop the previous month, showing a recovery that some might have found unexpected. Over the past year, this industry has seen an 8.2 per cent growth, suggesting resilience even in the face of operational challenges and logistical bottlenecks experienced earlier.
In addition to Transport, the Professional, Scientific, and Technical Services sector saw a significant rise in turnover, increasing by 3.9 per cent in July. These fields, which encompass everything from legal and accounting services to architecture and specialised scientific research, play a crucial role in driving innovation and supporting other sectors. Their steady performance has been further evidenced by an 8.4 per cent increase year-on-year, underlining the ongoing demand for expertise and technical skills across industries.
The Construction sector followed suit with a 2.3 per cent rise, a welcome development after recent stagnation. While construction activity often mirrors broader economic conditions, this uptick reflects a slight rebound in both residential and non-residential building projects. It may also indicate a delayed response to infrastructure investments or a renewal of projects previously put on hold.
Wholesale trade also managed a solid gain of 2.0 per cent in July, contributing to the overall positive trend. As a key intermediary between manufacturers and retailers, this sector often provides a snapshot of wider economic health, signalling potential shifts in supply and demand. A rise in wholesale trade turnover suggests that there is renewed activity further up the supply chain, likely driven by demand in other growing industries.
Despite these encouraging signs, not all sectors fared as well. Retail trade and Information Media and Telecommunications both experienced notable drops, with each sector seeing a 1.6 per cent decline. Retail, which has seen its share of volatility in recent months, continues to navigate the challenges posed by fluctuating consumer confidence, rising costs, and the ongoing shift towards online shopping. Similarly, the Information Media and Telecommunications sector has been grappling with significant transformations, as more businesses embrace digitalisation while facing competitive pressures that have weighed down on revenue.
Looking at the broader picture, the 13-industry aggregate shows a modest rise of 0.1 per cent in trend terms, while the seasonally adjusted figure stands at 1.0 per cent. While this may seem minimal, the fact that more than half of the industry sectors showed positive growth in turnover provides a glimmer of optimism for the Australian economy moving forward.
One of the sectors that truly stood out year-on-year was Electricity, Gas, Water, and Waste Services, which saw a staggering 16.8 per cent increase compared to July 2023. These industries, often the backbone of essential infrastructure, have experienced heightened demand in recent times due to various factors, including population growth, urban expansion, and the transition towards more sustainable energy solutions. The significant rise in turnover for these services reflects ongoing investments in capacity-building and upgrading utilities, as well as an increased focus on environmental sustainability.
However, the Mining sector found itself on the opposite end of the spectrum, recording a 1.2 per cent decline in turnover compared to July 2023. The Mining industry is notorious for its cyclical nature, with turnover often fluctuating based on global demand for commodities, price shifts, and external geopolitical factors. This particular drop may hint at reduced demand for certain resources or operational challenges that have impacted the sector’s overall performance.
Despite the fall in Mining turnover, the overall positive numbers for other industries highlight the diversity and adaptability of the Australian economy. Sectors such as Professional, Scientific, and Technical Services have demonstrated their ability to thrive even as traditional sectors like retail and mining face headwinds. This reflects an ongoing shift towards a more knowledge-based economy, where industries that provide specialised skills and services are becoming increasingly vital.
July’s figures suggest that while not all industries are moving in the same direction, the general trend points towards a gradual recovery. The fact that turnover was higher for 12 out of the 13 industries included in the indicator on a year-on-year basis speaks to a broad-based resurgence across key areas of the economy.
It is worth noting that while some sectors experienced a significant boost, the continued volatility in others, particularly retail and telecommunications, indicates that challenges remain. Rising interest rates, inflationary pressures, and changes in consumer behaviour are just a few of the factors influencing these sectors’ performance. Additionally, industries like Mining, while essential to Australia’s export economy, face ongoing uncertainty due to fluctuating global demand.
The rise in business turnover across most industries will likely have ripple effects throughout the economy. Higher turnover can lead to increased investment, job creation, and consumer spending, all of which are essential to sustained economic growth. It can also serve as an indicator of business confidence, suggesting that companies are feeling more optimistic about their future prospects.
Looking ahead, the ability of different sectors to maintain or even improve on these gains will depend on a combination of external and internal factors. Global economic conditions, supply chain disruptions, and local policy decisions will all play a role in shaping the business landscape in the coming months. For industries like Professional Services and Utilities, the outlook appears bright, with continued demand and investment likely to drive future growth.
However, industries like retail and media will need to adapt to ongoing shifts in consumer behaviour and technological advancements. The retail sector, in particular, may face further challenges as rising living costs continue to pinch household budgets, prompting more cautious spending habits.
