Xero - the global small business platform, today released analysis from its Small Business Insights program for March and
April, revealing the initial impact of COVID-19, the importance of the wage subsidy and what small businesses will need
as they move into the rebuild and recovery phase.
Year-on-year revenue for small business fell by 10% in March and 34% in April.
Craig Hudson, Xero Managing Director of New Zealand and the Pacific Islands, says revenue numbers began to fall after
New Zealand recorded its first COVID-19 case.
“Revenue dropped through March to the end of April as the pandemic hit New Zealand and we entered Alert Level 4
restrictions.
“We all know small businesses are feeling the pain of the economic shock caused by COVID-19, and spending habits
completely changed.
“Xero is currently processing Small Business Insights data for May which will show how the small business economy fared
as the country moved out of Alert Level 4.
“There is still a lot of hardship ahead, but in May we look forward to seeing the results as parts of the economy open
up again,” continues Hudson.Job losses in the small business sector
During the month of March, the number of jobs in small businesses dropped 4% or by approximately 24,000 employees.
The losses levelled out towards the end of March when the Government’s wage subsidy package began to be paid out to
small businesses across the country.
Hudson says it’s clear the wage subsidy package was an important piece of the puzzle in order for small businesses to
retain staff as we entered the lockdown period.
“As much as it’s easy to get lost in the numbers, every single job is precious. For those that can, shopping locally and
paying invoices on time will be vital to our recovery. That’s how we’ll keep money circulating through the economy and
give small businesses the confidence to employ again.”Regional impacts
COVID-19’s impact on regional employment was varied. Auckland, Hawke’s Bay and Northland saw decreases in employment
earlier than the rest of the country. In the last week of March, Auckland employment figures were down 4.4%, alongside
Northland (-3.5%) and Hawke’s Bay (-3.1%).
However, by the time New Zealand had been in lock down for several weeks, these impacts were widespread across the
country.
While Auckland saw the largest drop in job numbers in April (-5.7%) there were also reported declines in employment in
Otago (-2.1%), the Bay of Plenty (-3.1%), Waikato (-4.3%), Wellington (-4.6%), Northland (-4.9%) and the Hawke’s Bay
(-5.3%).
Hudson says: “Regardless of location, New Zealand’s small business sector has been hit hard by COVID-19. The sector will
continue to need support in the tail end of this pandemic. Now more than ever, cash flow is important to small and
medium businesses.
“To do your part to keep the New Zealand economy afloat and support the small business sector, the best thing to do is
pay your bills promptly. If we can keep money circulating around the country, this will be one of the ways to help
alleviate the economic shock of lockdown as we begin to reopen as a nation.
“Additionally, I encourage all Kiwis to get out and explore their own backyards and spend locally. Aotearoa is a country
of wonder and a surge of domestic tourism would go a long way in supporting key regions that were hit hard and fast.”