Australian business turnover slipped 0.1% in seasonally adjusted terms in May, marking the first monthly fall since October 2024, according to new data from the Australian Bureau of Statistics (ABS).
“This is the first fall in monthly business turnover since October 2024,” said Robert Ewing (pictured left), ABS head of business statistics.
The decline was led by a sharp drop in arts and recreation services, down 5.5%, driven largely by an 11.2% fall in the gambling activities subdivision following gains in April.
“Other notable falls were for manufacturing, down 1.3%, and retail trade, down 0.8%,” Ewing said in a media release.
The decline comes despite modest gains in consumer spending, though overall momentum remains soft amid persistent cost-of-living pressures.
While most sectors softened, turnover increased in a few key industries. Electricity, gas, water and waste services rose 1.7%, and wholesale trade lifted 1.1%.
Despite the monthly dip, turnover in May was still 3.3% higher than a year earlier, with 10 out of 13 industries recording annual growth.
The strongest yearly gains were in accommodation and food services, up 11.9%, and manufacturing, up 8.5%. However, mining fell 4.6% and arts and recreation services dropped 3.7% over the year.
In trend terms, total business turnover across all 13 industries edged up 0.1% for the month.
Employment Hero CEO Ben Thompson (pictured right) said the latest data signals that business momentum is stalling, with small firms bearing the brunt of pressure from rising costs and subdued demand.
“Monthly turnover falling for the first time since last October is the clearest sign, yet that business momentum is stalling, and small businesses are the first to feel it,” Thompson said.
“They’re dealing with higher costs across the board, hesitant consumers, and tighter margins. Retail, construction, and manufacturing are all under pressure.
“Employment Hero data shows hiring in these sectors is still growing, but hours worked haven’t shifted, which tells us businesses are stretched and holding back.”
Thompson criticised the Reserve Bank’s decision to hold rates steady, warning it has added pressure at a time when many businesses are already at their limits.
“The RBA’s decision to hold rates steady came at the worst possible time,” he said. “It offers no relief, especially in the same week businesses are processing their first pay runs with 3.5% minimum wage increases and 0.5% increase in superannuation contributions.
“Compliance costs are rising and we’re hearing from many employers that they’re already at their limit. Without support, small businesses won’t just pause investment and hiring. Some will scale back. Some will shut down. That’s how a soft patch turns into something worse.”
