NZ Small Business Recovery Continues In September
Xero, the global small business platform, today released its Small Business Insights (XSBI) for September revealing an uptick in small business jobs and year-on-year revenue growth in New Zealand.
Nationwide, the average number of jobs in the small business sector rose in September by nearly a full percent (0.9%) after falling in August by 1.4%. Small business employment is now sitting at 1.8% below pre-crisis levels.
Overall, small business revenue in New Zealand was up 3.4% year-on-year in September 2020.
During Auckland’s Alert Level 3 lockdown, small business jobs in the city dropped by 1.7%. The recovery began in September, spurred by 3.1% revenue growth in Auckland compared to September 2019.
Xero managing director for New Zealand & Pacific Islands Craig Hudson says the data points towards a resilience across Aotearoa’s small business sector, which has demonstrated the ability to bounce back.
“The growth of revenue following Alert Level restrictions earlier in the year and more recently after the latest lockdown in Auckland indicates that our small business owners are learning to operate and adapt to this new normal in the COVID-19 world,” says Hudson.
Queenstown revenue still down despite local tourism
Overall, small business revenue in Aotearoa was up 3.4% year-on-year in September 2020. With the exception of Queenstown (and Otago), all regions across Aotearoa saw a rise in revenues year-on-year including Northland (10.7%), Canterbury (7.1%), Wellington (5.4%), and Waikato (3.7%).
“The ongoing border closure and restriction on international visitors continues to have an impact on overall revenue figures in Queenstown. Despite a surge in local tourism in the region, it’s evident Kiwis aren’t spending as much as international tourists did in 2019,” says Hudson.
“However, it is encouraging to see revenues improving year-on-year across all other regions of Aotearoa. It appears people are taking the message of buying local to heart and really embracing local small business to help keep our economy thriving.”
Looking at specific industries, most sectors recorded positive growth in September with manufacturing up 11% year-on-year, followed by improvement in construction (9%), retail trade (8%) and real estate (6%).
Hospitality remains the most affected industry, posting a -7% year-on-year decrease in September, although this is an improvement on August revenue results year-on year, which were down 9%.
“We have also seen the average time it takes for small businesses to get paid stabilise at a rate slightly faster than pre-COVID (25.1 days), suggesting Kiwis are making an effort to settle invoices and pay bills on time to support suppliers. That will be a big help to many of our small businesses.”
Job recovery varying across the regions
Nationwide, the average number of jobs in the small business sector rose in September (0.9%) after falling in August and are now sitting at just 1.8% below pre-crisis levels.
Regionally jobs were up, compared to March 2020, in Wellington (3.9%), Hawke’s Bay (3.0%) and Canterbury (2.2%), while the rest of the country reported jobs still below March 2020 levels including Northland (-7.9%), Queenstown (-6.1%), Waikato (-3.0%) and Auckland (-2.8%).
“While most regions are yet to recover all jobs lost since March, the fact jobs numbers haven’t declined further as wage subsidies begin to wane is promising,” says Hudson.
Hospitality jobs remain the hardest hit with employment figures down 10.8% on the first week of March pre-crisis figures.
“Looking at the employment figures compared to revenue, it seems hospitality business owners are working longer hours without hiring extra hands due to the uncertainty of the future.
“It’s a reminder that many small business owners across the country are doing everything they can to keep things afloat right now and are a long way off ‘business as usual’. Workplace wellbeing is more important than ever with both business owners and employees needing as much support as possible,” concludes Hudson.