Methodology

• Data and population

  Data is de-identified and aggregated from Shift customers’ banking transaction data, streamed in near real-time to Shift’s platform, with cleaning applied over both the population and the underlying transaction data to ensure the data is suitable to be analysed for accurate insights and readings. Segment size definitions are based on annual revenue turnover: Small (<=$1.5m), Established (<=$10m), and Corporate (<=$75m), with firms with annual turnover over $75m are excluded from the dataset entirely. Industry classification is as per ANZSIC.

  Results are made representative of the mix of businesses in the Australian SME Economy across segment size, industry and state by applying sample weights derived from the Australian Bureau of Statistics, rather than Shift's own customer base. Seasonal adjustment is applied to only remove seasonal components associated with calendar months, by taking each month’s factor as its average deviation from the overall series average. Future editions will aim to upgrade this to the X-13 ARIMA methodology.

• The Shift SME Economy Index

  The Shift SME Economy Index is a net balance reading which tracks whether more Australian SME businesses are experiencing revenue growth or decline. It calculates the net percentage of businesses whose revenue grew over the past month by taking the percentage whose monthly revenue grew, minus the percentage whose monthly revenue fell (holding flat is defined as those with changes within ±2%). A rolling 3-month average is then taken over these monthly measures to derive the Shift SME Economy Index. The measure ranges from +100 (every business growing) to 0 (every business shrinking), with a reading of 50 neutral.

• Average sales and liquidity values

  Average sales and liquidity values are calculated as the total monthly sales of a business while liquidity is captured as the typical amount of spare cash a business has sitting in its everyday bank accounts, taken as the median daily balance over a 30-day period. Both values are reported as rolling 3-month averages.

• Revisions and notes to the data

  The Shift SME Economy Index is based on banking transaction data that is continuously updated to remain accurate. As new data is added over time, the historical dataset also continues to grow. As such, we expect historical revisions to the data.

• Correlation to external data

  The Shift SME Economy Index demonstrates moderate correlation to external data series from the Australian Bureau of Statistics (ABS). Below shows comparisons against the ABS Household Spending Indicator, and ABS Labour Force hours worked monthly data.

Source: Shift Financial Pty Ltd; ABS Household Spending Indicator; ABS Labour Force