Retail sputters despite overall business growth
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The news: The number of businesses actively trading in Australia increased by 73,125 in 2023-24, with a 16.8% entry rate outpacing the 14% exit rate, however the retail sector went backwards over the year, according to new data from the Australian Bureau of Statistics (ABS).
The numbers: The 362,893 exits was the highest number in the last four financial years, with safe harbour provisions protecting some businesses and delaying insolvencies during the height of pandemic lockdowns. There were 436,018 new business entries, slightly lower than in 2021-2022.
During FY24, 33,783 businesses moved from being employing to non-employing in net terms. There was a 4.9% increase in non-employing businesses overall.
Household-owned businesses now account for 49.9% of all businesses, with a lift of 15,370 in this category over the year. There was a 7.3% increase in financial corporations and a 4.3% increase in non-financial corporations.
Almost 92% of businesses had a turnover of less than $2 million, though this as up 9.9%, while just shy of one in four had a turnover under $50,000.
The context: The biggest percentage increases in businesses operating were transport, postal and warehousing, followed by health care and social assistance, and financial and insurance services.
The biggest declines were in agriculture, forestry and fishing, and retail trade (down 0.2%). These were the only two sectors to record declined. Retail has been under pressure as higher inflation has dampened consumer spending.
NSW has the biggest increase in the net increase of businesses out of the states and territories, Victoria had the biggest increase in raw numbers and ACT and WA performed best in terms of percentage increase.
However, the picture was a little more mixed on quarterly data. The seasonally adjusted rates show a 4.9% entry rate, or about 131,069 businesses, and a 4.8% exit rate, of 126,599 — that’s a 0.4% rise.
The source: Australian Bureau of Statistics
