Reference

Methodology

The Shift SME Economy Index measures the health and sustainability of the SME economy based on the typical (median) SME business, by combining both Year-on-Year (YoY) revenue growth rates and Year-on-Year liquidity growth rates at a business-level. A value above zero indicates that the intersection of a business’ revenue growth and liquidity growth is generating more sustainable performance versus a year ago, whereas a value below zero would indicate the opposite.

Readers should not view the underlying revenue and liquidity charts as additive to the Index. The median revenue growth rate across a population and the median liquidity growth rate across a population will not (necessarily) be the same as the median of the combined revenue and liquidity. It is precisely this intersection that the Shift SME Economy Index measures.

  • Data and population

    Data is aggregated and anonymised from Shift customers who stream their banking transaction data 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. Firms with annual turnover over $75m are excluded from the dataset entirely. Industry classification is as per ANZSIC.

  • The Shift SME Economy Index

    The Shift SME Economy Index combines a business’ revenue growth and liquidity growth. Specifically, it is the geometric mean of a business’ YoY revenue growth and YoY liquidity growth. The median value is calculated over the population, and broken down across Size, Industry, and state.

  • Components of the Shift SME Economy Index

    Revenue growth is calculated as the growth in the total monthly sales of a business compared to the prior year’s period. Liquidity growth is similarly measured as the growth in a business’ liquidity compared to the prior year. Liquidity captures 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. Like the Shift SME Economy Index, the median is taken over the population for both revenue growth and liquidity growth, and broken down across Size, Industry, and state.

  • Revisions and notes to the data

    The Shift SME Economy Index is based on banking data that is continuously updated to remain accurate. As new data is added over time, the historical dataset continues to grow. As such, we expect historical revisions to the data. The data is presented on a Year-on-Year basis to control for seasonality but is not otherwise seasonally adjusted.

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