Small business: Jobs down, revenue up

Small business revenues in Queenstown are down 6.4 per cent and although that is improving, many are still hurting and need help. Photo / Destination Queenstown

Revenue through New Zealand's small businesses in June was back to year-earlier levels although the number of people they employed fell a little from May.

Data from small business accounting software provider Xero showed the rebound in revenue in June jumped from May, when revenue was down 17 per cent on May last year, and April, when revenue was down 39 per cent year-on-year - adjusted from the previously published figures of 22 per cent for May and 41 per cent for April.

"This revenue recovery shows what's possible when New Zealanders spend locally," said Craig Hudson, Xero's managing director for NZ and the Pacific IsIands.

But he cautioned that the figures are an average and that although some businesses have been doing "extremely well" post-lockdown, "others are still hurting and need as much support as possible".

The data showed revenue through small businesses in Auckland was down 2.1 per cent on the same month a year earlier, and down 6.4 per cent in Queenstown but an improvement from April's 59.7 per cent drop.

But revenue was up 3.9 per cent in Canterbury, up 2.8 per cent in Northland and up 2.2 per cent in Wellington.

From worst to best

Xero operates in Australia and Britain, being the largest cloud accounting software provider to small businesses in both countries, and said its customers are doing better post-lockdown in NZ than their counterparts in the other two countries, although they had fared worse during lockdown itself.

Australian revenue was down 10 per cent in April but had recovered to still being down 8 percent in June – a surge in covid-19 infections in Victoria, Australia's second-largest state by population, has forced a return to lockdown this month.

In Britain, year-on-year revenue bottomed in May, down 29 per cent and was still 18 per cent lower in June.

Hudson said Xero's employment data correlates with changes in the Government's wage subsidy and the number employed in small businesses in NZ dropped 2.2 per cent between June 2 and the end of the month.

"This drop in jobs in the latter half of the month coincides with the tightening of eligibility for the wage subsidy," he said.

"Despite this fall in employment numbers over June, it's a positive sign that small business employment numbers are tracking slightly higher than they were in April."

'Small businesses more than just numbers'

Small businesses in NZ were also doing better at retaining staff than those in Australia and Britain, providing 3.6 per cent fewer jobs in June than pre-crisis levels. In Australia and Britain they fell 6.8 per cent and 8.5 per cent respectively.

"Small businesses are more than just numbers. They are about livelihoods and people. At the moment they are doing it tough," Hudson said.

He repeated previous calls for those spending with locally owned small businesses to pay their bills on time. He noted that although there had been a sharp increase in the time taken to pay bills during lockdown, the average time for businesses to be paid has fallen to 26.9 days, a day longer than in February.

As the nation began to come out of lockdown, the government asked its own departments and agencies, most of the companies within the S&P/NZX 50 Index, other significant private companies and the banking industry to participate in its plan to have 95 percent of invoices paid within 10 working days.

Xero counted 392,000 small businesses in NZ as subscribers at March 31 out of the nation's total of about 500,000. It had 914,000 customers in Australia and 613,000 in Britain.

BusinessDesk