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The Australian Bureau of Statistics (ABS) has released its latest business turnover data for the month of June 2023, revealing that the utilities sector experienced the highest total value of goods sold due to increased demand for heaters during winter.
The ABS measures business turnover by calculating the total value of goods sold within each industry.
The industries with the largest turnovers are retail, wholesale trade, mining, manufacturing, and construction, making them significant contributors to the economy.
Weather’s influence
The rise of 12 per cent in the turnover of the electricity, gas, water, and waste services industry – considered part of the utilities sector – is relatively minor in the broader economic context. This increase is attributed to a cold start to winter and higher energy prices.
“The cold start to winter coupled with higher energy prices has driven a 12 per cent rise in turnover for the electricity, gas, water and waste services industry,” ABS Head of Business Indicators Ben Dorber said.
“Turnover is still 4.3 per cent lower than the same time last year when wholesale energy prices were higher.”
Similarly, the Information, media, and telecommunication services industry saw a 4.6 per cent month-on-month increase, but this gain was not as substantial as in previous months.
Construction on the mend
Comparing the data to June 2022, the construction industry exhibits a positive trend, with a substantial 18.8 per cent year-on-year increase in turnover.
On the other hand, the mining industry experienced a notable decline in overall business turnover by 18.1 per cent, primarily due to the decrease in commodity and energy prices from their highs in 2022.
However, mining turnover increased by two per cent month-on-month compared to May.
Challenges in retail
Retail turnover for June showed a decline, in line with the latest ABS retail spending data.
Wholesale trade also experienced a negative trend, albeit to a lesser extent at 0.4 per cent compared to retail’s 1.8 per cent drop.
“It’s hard to argue that consumer is not feeling the strain of higher rates with three-quarters of lower retail trade,” City Index Senior Market Analyst Matt Simpson said.
“It certainly plays into the hands of the crowd calling for a peak RBA rate at 4.1 per cent, following the RBA’s latest hold.”
The transport, postal, and warehousing industry turnover remained relatively stable compared to May, possibly hinting at a slowdown in the decline of online sales.
Given that the data lags by a month, we could see this industry further drop down into negative territory.
The accommodation and food industry turnover experienced the most significant drop, aligning with the ongoing trend of decreased eating-out activities observed in the latest ABS retail data, which recorded the first decline in cafes, restaurants, and takeaway food services since the Delta strain lockdowns.
