Growth For New Zealand Small Business Revenue And Jobs In February

 Xero, the global small business platform, today released its Xero Small Business Insights (XSBI) data for February 2021, which showed small business revenue was up 1.5% year-on-year.

Small business jobs were also up 1.8% in February from pre-crisis levels (first week of March 2020). But the short Alert Level Three lockdown in Auckland did have a negative impact on job figures.

Xero’s Managing Director for New Zealand & Pacific Islands, Craig Hudson, says the overall growth in small business revenue was encouraging, especially in the wake of recent declining GDP figures.

“It’s encouraging to see messages of shopping local seem to be resonating with Kiwis, helping keep our small business afloat with their wallets and spending decisions,” says Hudson.

“It’s also pleasing to see a revision for both December and January’s revenue figures, which have both increased. I suspect there were many Kiwis who put off finishing their books to get into the summer break, with these accounts now up-to-date as of the end of February.

“Overall, while GDP was down 1% in the December 2020 quarter according to Stats NZ, we’ve seen small business revenues specifically continue to grow.”

With the exception of hospitality, all industries saw year-on-year revenue grow in February, including manufacturing (+8%), real estate (+7%), construction (+6%), retail trade (+4%) and professional services (+2%). The hospitality sector revenue was down 14% year-on-year.

Regionally, revenues grew year-on-year in February in Hawke’s Bay (+8.3%), Northland (+7.1%), Wellington (+4.6%), Canterbury (+4.4%), Bay of Plenty (+4.2%), Auckland (+0.8%) and Waikato (+0.6).

However, Queenstown remains the most impacted region with small business revenue down 19.7% year-on-year in February.

“It’s encouraging to see small business revenue grow in February, although we need to note we're still below pre-crisis levels. We need to continue buying and supporting local businesses to further our overall economic recovery,” says Hudson.

Job figures impacted by short, sharp lockdowns

Job figures are largely stable month-to-month (down 0.1% between January and February), but are up 1.8% from pre-crisis in March 2020.

However, changes in jobs by region shows a decrease of 3.7% in Auckland, which coincides with the Alert Level Three lockdown restrictions (14 to 17 February).

“Looking at the data, it looks like there is a dip in payslips going out, which some may attribute to actual job losses,” says Hudson.

“For example, hospitality jobs are down 2.8% in February, with the majority of this decline recorded in the last few weeks of the month, coinciding with the shift in Alert Levels and Auckland’s Level Three lockdown.

“However, when we see a drop like this, it is more likely to be the result of casual employees not working and thus not being paid and receiving a payslip - rather than actually losing their job.

“Our understanding of this is that these are not permanent losses of jobs, but where people were unable to work and get paid due to lockdown. When we look at similar, short and sharp lockdown periods in Australia, we see these figures remedy themselves as we move back down Alert Levels.”

For further information on the Xero Small Business Insights February metrics please refer to the XSBI Update for New Zealand.

About Xero

Xero is a cloud-based accounting software platform for small businesses with 2.45 million subscribers globally. Through Xero, small business owners and their advisors have access to real-time financial data any time, anywhere and on any device. Xero offers an ecosystem of over 800 third-party apps and 200 plus connections to banks and other financial partners. In 2020 and 2021, Xero was included in the Bloomberg Gender-Equality Index and in 2020, Xero was recognised by IDC MarketScape as a leader in its worldwide SaaS and cloud-enabled small business finance and accounting applications vendor assessment.

About Xero Small Business Insights 
The Xero Small Business Insights (XSBI) program provides analysis of the sector’s health, with metrics based on anonymised, aggregated data drawn from hundreds of thousands of subscribers in partnership with AlphaBeta Australia (part of Accenture). The result is a picture of business conditions that’s more accurate than most private surveys, which have a far smaller sample size, and more frequently updated than other New Zealand data on small business. Xero is currently producing a series of specialised monthly metrics which analyse the impact of COVID-19 on the small business sector.

About Accenture

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialised skills across more than 40 industries and all business functions — underpinned by the world’s largest delivery network — Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders.

Note to the editor

Previous iterations of the XSBI data have listed snapshots of data from the time it was captured. Some of these historical data points change as bookkeepers and accountants finalise their clients’ accounts, which can impact the specifics of the percentages.

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