While the year to June saw a solid performance for company profits, the 2022-23 financial year has opened with a slide in business turnover in half the 13 selected industries measured by the Australian Bureau of Statistics (ABS).
After dominating the year to June and especially the period March to June after the Russian invasion of Ukraine boosted key commodity prices, July saw a cooling according to data from the ABS.
The ABS said that business turnover fell in seven of the 13 selected industries in July, with mining leading the way.
Kate Lamb, head of Business Indicators at the ABS, said: “The mining industry saw the largest percentage fall in business turnover in July, from its recent peak in June, in line with lower coal and iron ore exports in July.”
“The July 10.1 per cent fall in mining follows seven months of consecutive rises, as commodity prices surged over the first half of the year, something we also saw in the latest in the June quarter national accounts and balance of payments where the performance of the resources dominated.
The balance of payments showed coal exports topped $A100 billion for the first time in the year to June and resource sectors reported a record $83 billion in profits for the June quarter.
Manufacturing turnover fell 3.8% in July, following five consecutive monthly rises, partly reflecting supply chain disruptions and labour shortages in the industry.
Of the six industries to record rises in business turnover in July, the electricity, gas, water and waste services industry saw the largest increase (5.0%), with wholesale gas and electricity prices remaining elevated. This was the third consecutive monthly rise for the industry, according to the ABS.
Retail trade saw a rise of 2.9% in July which has been supported by generally positive updates from the likes of Coles, The Reject Shop, Woolies, JB Hi Fi, Temple & Webster and Lovisa.
Importantly for the September quarter and June half year reporting periods, the ABS said all 13 industries recorded year-on-year increases in business turnover in July, compared with the early phase of the COVID-19 Delta period in July 2021.
Analysts forecast a solid performance this half against the back half of 2021 when Covid lockdowns and travel restrictions impacted many sectors and resource prices were much lower than they are now and forecast to be over the next few months.
The ABS points out that business turnover differs from the National Accounts concept of output. For example, the value of goods sold by wholesalers and subsequently retailers are reflected in turnover for both industries while National Accounts output measures the margins gained by each industry.
