The small-business sector experienced its fastest revenue growth in six months in September. The latest Xero Small Business Insights also reports an increase in the number of jobs in the sector – this metric had been static for the two previous months..
The research revealed that the revenue of small businesses grew by 5.2 per cent year-on-year, the fastest pace since March 2020. This is just above pre-crisis average annual revenue growth of 4.6 per cent recorded from July 2019 to February 2020.
Victoria, where lockdowns continued in September, recorded a 0.4 per cent year-on-year revenue rise for the month, which was a significant turnaround from the six per cent year-on-year decline recorded in August. However, it is still behind from the rest of Australia, with revenue growth almost five percentage points lower than the nationwide outcome.
Small business jobs rose by 0.8 per cent in September and have now recovered around two-thirds of the losses experienced when the COVID crisis hit. Victoria contributed significantly to this growth where jobs rose 0.9 per cent in September after falling 3.6 per cent between June and August. The Victorian labour market is still the most challenging across Australia, however, with the number of jobs 10.9 per cent lower than prior to the pandemic.
“It is encouraging to see national revenue figures returning to pre-COVID levels and industries that were hit the hardest – hospitality and arts and recreation – experiencing a growth in jobs,” Trent Innes, Managing Director Australia and Asia, Xero, said. “While small business has been showing a promising recovery, there is still a lot of support needed by the sector to continue this upward trajectory and ensure it can sustain any further turbulence. The September data also provides optimism of a steady rebound in Victoria as restrictions continue to ease.”
Casual jobs have also seen recovery after being hit hard at the onset of the pandemic with a 25 per cent decline in late March and early April. From June, casual workers began to be rehired and employment of casuals has risen by 24 per cent. There is, though, still a long way to go before the casual job figures would return to pre-pandemic levels.
“Continued improvement in payment times to small businesses will be pivotal at this time. This can ease the strain the pandemic is placing on cash flow and boost confidence for businesses to rehire,” Innes said
“This month is a critical one for small businesses and their employees with various government support measures either coming to an end or getting adjusted. The XSBI October data will provide early indications of how small businesses are adjusting to the new policy settings.”