Warning Signs Flash as Australia’s Business Revenues Fall for First Time Since 2024

Australia’s economic recovery has hit another stumbling block, with business revenues declining in May, the first monthly drop since October 2024. This signals fresh warnings about Australia’s fragile economic outlook.

Latest data retrieved from the Australian Bureau of Statistics (ABS) showed that turnover fell across five of the 13 industries tracked. The biggest drop came from the arts and recreation sector, which plunged 5.5 percent in May. Manufacturing also dropped by 1.3 percent, while retail trade dipped 0.8 percent.

“This is the first fall in monthly business turnover since October 2024,” said Robert Ewing, head of business statistics at the ABS. However, the downturn was partially offset by gains in electricity, gas, water, and waste services (+1.7 percent) and wholesale trade (+1.1 percent).

Market analysts say the data underscores the broader economic slowdown. IG market strategist Tony Sycamore described the figures as further evidence that the country’s economy has entered a “flat patch.”
“It aligns with other indicators pointing to a subdued economic environment, especially with weak retail sales suggesting households are still tightening their belts,” Tony Sycamore said in a released statement.

Sycamore also added that the softness reinforces the case for further monetary policy easing from the Reserve Bank of Australia (RBA) to reignite consumer confidence and economic momentum into 2025.
Despite the country’s monthly setback, overall business turnover in May was still 3.3% higher than a year earlier, according to the latest data from ABS. The news about Australia’s business outlook comes just days after the RBA surprised markets by holding the official cash rate steady at 3.85%, defying expectations of a rate cut. RBA Governor Michele Bullock said the central bank wanted to assess June quarter inflation data, due on July 20.

“We just want to confirm with a full quarterly CPI that we’re still on track to deliver inflation down to the middle of the target band over time,” RBA Governor Michele Bullock said during a media briefing.

But the RBA’s decision sparked frustration among Australia’s homeowners and industry observers. Aaron Scott, co-founder of property platform bRight Agent, called the hold a “cruel blow” to millions of mortgage holders. “Although we expect spending to pick up in 2025, a slower rate-cutting cycle could weigh on the pace of recovery,” said CBA senior economist Belinda Allen. According to RBA’s household spending index, consumer activity rose just 0.3 percent in June, marking a third straight month of modest gains after 0.4 percent increases in both April and May.