Business turnover falls for the first time since last October

According to ABS data, business turnover has dropped for the first time since October 2024, with some saying that it is the “clearest sign” of business momentum stalling.

The Australian Bureau of Statistics (ABS) revealed last week that business turnover fell 0.1 per cent in seasonally adjusted terms in May 2025, marking the “first fall in monthly business turnover since October 2024”, said Robert Ewing, ABS head of business statistics.

“The arts and recreation services industry had the largest fall, down 5.5 per cent. The gambling activities subdivision drove this drop with a fall of 11.2 per cent, following a rise in April.

“Other notable falls were for manufacturing, down 1.3 per cent, and retail trade, down 0.8 per cent.”

“Softening the fall, we saw rises in electricity, gas, water and waste services, up 1.7 per cent, and wholesale trade, up 1.1 per cent,” added Ewing.

According to the ABS, compared to the May 2024 data, turnover was higher for 10 of the 13 industries included in the indicator.

Chief executive of Employment Hero, Ben Thompson, argued that the fall in business turnover marks an overall stalling of business momentum across the country.

“Monthly turnover falling for the first time since last October is the clearest sign yet that business momentum is stalling, and small businesses are the first to feel it,” said Thompson.

“They’re dealing with higher costs across the board, hesitant consumers, and tighter margins. Retail, construction, and manufacturing are all under pressure.

“Employment Hero data shows hiring in these sectors is still growing, but hours worked haven’t shifted, which tells us businesses are stretched and holding back.”

Thompson spoke on the RBA’s “shock” decision to hold interest rates, which the CPA have already claimed will be a major blow to small-business owners, thus elevating pressure on the government to provide a necessary boost.

“The RBA’s decision to hold rates steady came at the worst possible time. It offers no relief, especially in the same week businesses are processing their first pay runs with 3.5 per cent minimum wage increases and 0.5 per cent increase in superannuation contributions.

“Compliance costs are rising and we’re hearing from many employers that they’re already at their limit.

“Without support, small businesses won’t just pause investment and hiring. Some will scale back. Some will shut down. That’s how a soft patch turns into something worse.”

Kace O'Neill

Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.