The latest Xero Small Business Index shows the index still on a continuing decline as restrictions were being imposed across Australia have affected overall growth, particularly when it came to jobs.
The Index fell by nine points to 92 points in August, continuing the downward trend from the previous month. This meant Australian small business performance in August was below average as small-business jobs rose just 1.3 per cent year-on-year in August, its slowest pace of growth since October 2020. Despite the jobs decline, there was significant sales growth recorded in August as well with a 6.4 per cent year-on-year growth despite the lockdowns imposed during that period. In turn, the sales growth was seen to have helped prevent the Index from further decline.
Revenue-wise, the report noted that the hardest-hit sectors in August continued to be hospitality and arts and recreation, falling 11.4 per cent and 6.5 per cent year-on-year. Meanwhile, healthcare and real estate services as the strongest performing sectors in August with 14.8 per cent and 11 per cent year-on-year growth respectively. Sales growth in construction rebounded to 7.4 per cent year-on-year in August, after just 3.4 per cent in July, on the back of the two-week ban on construction activity in Greater Sydney.
“With more than half the Australian population under stay-at-home orders in August, it was yet another tough month for small businesses as jobs growth slowed to its lowest result since October last year,” Joseph Lyons, Managing Director Australia and Asia, Xero said. “The Xero Small Business Insights data does provide some green shoots of hope, with an increase in sales offsetting the weakened jobs growth. Time and again, small businesses demonstrate their adaptability and resilience.
“As Australians continue to roll up their sleeves for their vaccinations in record numbers, small businesses in NSW and Victoria are preparing for their own shot in the arm as reopening dates inch closer,” Lyons added. “Now’s the time for Australians to support the businesses springing back to life, to give them a much-needed boost heading into Christmas and the summer holidays.”
The Xero Small Business Index is published by small-business platform Xero, in partnership with Accenture and is based on aggregated and anonymised transactions from hundreds of thousands of small businesses.