Queensland small businesses making hay while sun shines
Billion-dollar windfalls from government, lower electricity prices forecast, increased spending from shoppers and improving economic activity – Queensland small businesses could be forgiven for thinking all, if not some, of their Christmases are coming at once.
The latest Chamber of Commerce and Industry Queensland (CCIQ) Economic Update – the fourth since its launch in September – paints a rosy picture heading into the holiday season and with the biggest retail-spend week ahead in the lead-up to Christmas and Boxing Day sales.
CCIQ Policy Analyst Cameron Meiklejohn said the Queensland economy has continued to improve across the last month, with a number of key indicators highlighting a sustained momentum that has been evident since June 2016
“A third straight quarter of increased economic activity, which has been underpinned by household consumption and private capital expenditure, is particularly encouraging and is a further sign of a transition to the post-mining boom,” he said.
“Relative to the rest of Australia, the Queensland economy is improving. Some of the difficulties and challenges of the past two years appear to be passing, with a return in the volume of economic activity.”
Mr Meiklejohn said retail trade figures had been a standout in recent months, with the sector currently recording national-leading sales growth of 4.1 per cent across the 12 months to October 2016.
“This is a positive sign for the numerous small retail businesses that operate across Queensland and is another indication of returning consumer confidence and spending,” he said.
“Driven by sustained performance across clothing, fashion and household goods, Queensland is the only state in Australia with momentum leading into the critical Christmas sales period.”
CCIQ had previously forecast a growth figure of 3.9 per cent for Christmas sales in Queensland – tipped to reach $9.3 billion – in the period which takes in the last two weeks of November and all of December.
But there was a cautionary note.
“While current retail figures are strong, given record low wages growth, it is still unknown how long this recent momentum will be maintained in Queensland,” Mr Meiklejohn said.
CCIQ’s November Economic Update said while small businesses could sense economic momentum building, it would need more than three months of improving conditions to convince them that the economy had well and truly turned the corner.
One of the key aspects of the monthly report is the Economic Performance Indicator, which provides an overall measurement of how the state economy is performing and tracks data relative to the other Australian state economies.
Mr Meiklejohn said it rose 0.3 percentage points in the November update and has surged in December by 0.9 percentage points. It is now 2.1 points above the five-year average and a strong sign of improving conditions.
”All the latest data is very encouraging. There is certainly enough evidence to suggest that retail and hospitality businesses should experience a solid performance across the vital Christmas trade period and better than the past two years,” he said.
While clothing and fashion had enjoyed a boon, the homewares category of retail has also improved in recent months, driven by particularly strong performance within the hardware category.
“A surge in retail sales transactions for homewares, electronic goods and hardware products tends to occur when the number of houses/units being bought and sold approaches a peak as new owners furnish their purchase,” Mr Meiklejohn said.
“Given that transfers in residential property sales are contracting, we could see a similar contraction in this category of retail in the coming months.”
Some of the key statistics contained in CCIQ’s Queensland Economic Update include:
- State Final Demand – rose by 0.1 per cent, driven by increases in household consumption (1.0 per cent) and private capital expenditure (2.1 per cent)
- Economic Performance Indicator – rose by 0.9 percentage points (2.1 points above the five-year average)
- Unemployment – fell by 0.1 percentage points to 6.0 per cent, but remains higher than national rate of 5.6 per cent.
- Retail trade – rose by 0.5 per cent, and is growing at levels not recorded since early 2014.
- Building approvals – fell to a two year low
- High-density building approvals - fell by 8.4 per cent
- Residential property – rose by 3.1 per cent in Brisbane, which continues to be more competitive and affordable than Sydney and Melbourne
About the Queensland Economic Update:
CCIQ’s monthly report will be crucial reading for the state’s 410,000 small businesses, industry groups, Government departments and politicians at all three levels. It will offer an ongoing examination of key indicators, covering labour, finance, construction, retail and demographics, delivering a much needed source of data and information for Queensland businesses.