The latest Xero Small Business Insights show impact of Auckland’s second lockdown
Xero, the global small business platform, released its Small Business Insights (XSBI) for August, which showed New Zealand small business revenue grew despite the Auckland lockdown, but employment figures fell.
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Revenue for New Zealand small businesses was 4% higher in August 2020 compared to the same time last year. This marks the third consecutive month of positive revenue growth for the small business sector. However, small business jobs fell 1.4% in August compared to July and are now 2.9% below their pre-crisis level.
In Auckland, the second Alert Level 3 lockdown resulted in small business revenue falling by -4.4% year-on-year and employment figures dropped to -4.3% below pre-crisis figures.
Craig Hudson, Xero managing director for New Zealand & Pacific Islands, says these trends indicate the road to recovery will be bumpy, with upcoming September data set to reveal how small
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businesses nationwide coped in the wake of Auckland’s second lockdown and the end of the wage subsidy.
“Compared to our international counterparts, New Zealand has seen an encouraging recovery in small business revenue over the last few months. But the second lockdown in Auckland has shown how quickly things can change,” says Hudson.
“We won’t know the full impact until September’s SBI data, but it’s a reminder that during these uncertain times we need to remember to continue buying locally and paying bills on time to help keep money circulating in our economy.”
Encouragingly, after increasing sharply during the initial part of the crisis, the average time for small businesses to be paid was 25.1 days in August – 0.8 days faster than pre-crisis.
Small business revenue remains steady, hospitality down
Overall, revenue growth was stable across most industries with the exception of hospitality, which deteriorated in August, to be 9% lower year-on-year.
Additionally, some industries saw significant revenue growth year-on-year in August including rental and real estate (11%), manufacturing (11%) and construction (9%).
“The second lockdown in Auckland coupled with the ongoing challenges facing Queenstown as a result of border closures, have contributed to the hospitality sector’s revenue being impacted,” says Hudson.
“It is encouraging though to see overall small business revenue increase across New Zealand, with the regions and their lower Alert Level allowing for relatively unaffected day-to-day trading.
“It’s also pleasing to see New Zealand small business revenue compared to Australia and the United Kingdom. While Australian revenues have also recovered, they are yet to reach pre-crisis levels while the United Kingdom small business revenue figures continue to experience negative year-on-year growth.”
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