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Xero Launches Small Business Economic Index

Wellington — 5 May, 2021 — Xero, the global small business platform, today launched its new monthly index showing a summary statistic of small business economic health based on sales, jobs, time to be paid and wages.

The new Small Business Index, part of the Xero Small Business Insights program, produced in partnership with Accenture, is based on aggregated and anonymised transactions from over 300,000 small businesses and shows performance changes in the short and long term across the three countries.

When the index is above 100 it means the small business sector is performing better than average (average calculated from January 2017 to December 2019) and when the index is below 100 it means the small business sector is performing below average.

Steve Vamos, Xero CEO, said: "Small businesses are central to our economies, and at the heart of our communities and Xero exists to help them be more successful. Launching the Xero Small Business Index using anonymised and aggregated data from our platform helps ensure that the contribution of small business and the conditions they experience are more visible and quantified so they can be supported in the best possible way. It's not all about economics, we are talking about people; small business owners, their families, their employees and the communities they work in and are part of.”

March results for the Xero Small Business Index

Overall Index

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The first results from the Index show New Zealand small businesses continued to recover from the economic impact of the pandemic during March 2021.

In March 2021 the index rose by 17 points to 122 points, up 16.0% compared to February 2021. The rise was driven by improvements in all four sub-metrics during March 2021 - sales, jobs, time to be paid and wages.

This is the second month the index has been above 100, indicating that overall small business performance remains better than average and has made a solid start to 2021.

Key metrics

  • Sales in small businesses rose 14.3% y/y in March 2021. To note that this result was inflated by the effects of weak year-on-year sales results for March 2020. [1]
  • The average time to be paid in small businesses was 21.2 days during March 2021 - down 4.3 days compared to pre-pandemic times (February 2020). Although this is positive, small businesses were still paid almost a full working week late (4.9 days) on average in March.
  • Wages in small businesses, as measured by average employee hourly earnings, rose 3.2% y/y in March 2021. This is around results recorded in recent months but this is still below the 2019 monthly average growth rate of 3.8% y/y. 
  • Jobs in small businesses grew 3.7% y/y in March 2021, the strongest growth rate recorded since March 2020 prior to the pandemic impacting on employment.

Craig Hudson, Xero’s Managing Director for New Zealand and the Pacific Islands, says the new index will be a valuable barometer to measure the ongoing performance of Aotearoa’s small business economy.

“It’s encouraging to see sales and job numbers continue to climb year-on-year. Sales were up year-on-year across all industries in March, with retail (+25.5%), manufacturing (+23.5%), real estate (+17.6%) and hospitality (+17%) seeing the strongest growth. However, these numbers are inflated as sales numbers dropped at the end of March 2020 when we first entered Alert Level 4 lockdown,” says Hudson.

“We also saw job numbers grow across all industries year-on-year for March 2021 with the exception of hospitality (-7.8%), which remains impacted by the pandemic’s effect on the tourism industry at large.

“Furthermore, small businesses are getting paid 4.3 days faster than they were before COVID-19 hit, which is a significant improvement and a great result for small business owners nationwide. Strong cash flow into a small business can make the difference between being able to pay their staff, themselves and their suppliers or not, and it’s clear Kiwis have taken this to heart.

Not only this, the average late payment period has fallen to just 4.9 days. While there’s still room for improvement, this figure is a good indication that Kiwis are making a considered effort to pay their outstanding bills on time and support their local business economy.”

To find out more about how it is constructed see the background information and methodology.

To read the full March results, including to download the data, go to

[1] To note that the index figure for sales of +14.3 y/y growth for March 2021 partially reflects weak growth or declining sales in March 2020 across almost all industries in New Zealand as the country moved to Alert level 3 and then 4 in the final week of the month. To adjust for this (called a base effect) in March 2021 we also report the annualised two-year-ended growth rate, at +5.8% y/y, which gives a more accurate indication of the strength of sales growth currently in New Zealand. (sales were down 2.0% y/y in March 2020).

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