We’re well into early 2019, but you may have noticed that Christmas 2018 has received an unusual amount of Australian media attention in the past few weeks. That’s because two key economic indicators – December retail sales and business confidence –  came in surprisingly weak for what should be an upbeat month.

Adding to these worrisome signals is an economic reading today from Xero Small Business Insights, which examines aggregated data from hundreds of thousands of anonymised subscribers. It reveals that positive cash flow in December posted the first annual decline in at least four years, breaking a multiyear uptrend for small businesses across the country.

Cash flow measures how much money is coming in the door versus how much is leaving. In December, some 55.6% of small businesses were cash flow positive, a high point for the year. But that was a drop from one year earlier: In December 2017, the figure for cash-flow positive businesses was higher at 56.7%.

A one-percentage-point difference may not sound like much to get excited about. But it’s the directional trend that’s important. What happened in 2018 to halt a steady annual increase in positive cash flow? And what does it tell us about conditions in 2019 for the small business sector, which employ 40% of Australian workers and has been called the engine room of the economy?

In looking for answers, it helps to examine payment times. We know small businesses regularly endure late payments, which crimps cash flow. At some points in 2018, the average payment on a 30-day invoice arrived nine days late. But in December, payment times were best on record at Xero: The average business was paid just four days late. So it’s hard to blame late payments for the decline in cash flow.

What does a look at the broader economy tell us? NAB’s monthly business survey found that business conditions fell sharply in December, recording the largest drop since the Great Financial Crisis. And the Australian Bureau of Statistics reported that retail sales fell in December, missing economists’ expectations.

“Our local trade was down, specifically in wholesale,” said Kim Pierce, founder of skin-care products maker Babe Australia, based in the Melbourne area. “Given the slower local wholesale throughout 2018, we’ve been focusing and investing in our exports, which actually lifted us to an overall increase in Christmas sales. Exports will drive our strategy for 2019.”

Why are local shoppers closing their wallets? Some economists have pointed to the fall in Australian house prices, which has dented consumer confidence.

“While it is true that retail has been underperforming relative to the rest of the consumer basket for a while, it’s clear that the correction in dwelling prices is now spreading to the broader economy,” CBA senior economist Gareth Aird wrote in a recent note to clients.

Weaker home prices can spook not just consumers, but the many small business owners who have pledged their homes when taking out business loans. A drop in house prices can translate into lower levels of equity available to finance or support their ventures. And the slide in Australian home prices over the December quarter was the largest since the early 1980s, according to CoreLogic.

While it’s too soon to say whether the drop in real estate will produce sustained pressure on small business cash flow, it’s a metric that bears watching at Xero Small Business Insights in the coming months. Check out the full complement of small business data on this site, including Hiring People and Trading Overseas, and be sure to visit early each month for an updated view of the small business economy.