Small businesses ‘doing better’ than 12 months ago
Small businesses around the country were doing better in August than they were before the Covid-19 pandemic hit New Zealand, latest Xero data shows.
The cloud accounting software’s business insights showed small business revenue rose 4 per cent in August compared with the same time last year.
This was the third consecutive month of positive revenue growth for New Zealand small businesses.
Blenheim cafe Herb and Olive owner Richard Barton said revenue for his 12-monthold business was up 40 per cent in August compared with the same time last year, despite having had to close for a month during alert level 4 earlier this year.
Barton’s cafe provided catering for winery staff in the region, which allowed them to operate during level 4.
And then in level 3 in April, Herb and Olive shifted its business to online deliveries.
He said sales in July and August had been boosted by domestic travel.
‘‘Marlborough is a popular tourism [destination].
‘‘There has also been a lot of interest in buying properties and lifestyle blocks, particularly from expats returning to New Zealand because of Covid-19,’’ Barton said.
But the re-emergence of Covid-19 in Auckland and the shift to level 3 in August dropped revenue for small businesses in that city by 4 per cent year-on-year.
Employment was also down about 4 per cent compared with pre-crisis figures.
Xero NZ and Pacific managing director Craig Hudson said the trends indicated the road to recovery would be bumpy, and data collated for this month would reveal the true impacts of the August lockdown and the end of the wage subsidy.
‘‘Compared with our international counterparts, New Zealand has seen an encouraging recovery in small business revenue over the past few months.
‘‘But the second lockdown in Auckland has shown how quickly things can change,’’ Hudson said.
Despite the second lockdown affecting the country’s largest city, New Zealand small businesses were outperforming their counterparts in the United Kingdom and Australia.
‘‘While Australian revenues have also recovered, they are yet to reach pre-crisis levels while the United Kingdom small business revenue figures continue to experience negative year-onyear growth,’’ Hudson said.
Overall, revenue growth was stable across most industries except for hospitality, which deteriorated in August to be 9 per cent lower year-on-year.
The rental and real estate markets, as well as manufacturing and construction had strong revenue growth in August, up 11 per cent.
Regionally, Queenstown recorded the largest drop in employment figures from precrisis, with jobs down 9 per cent at the end of August.
Waikato, Northland, Auckland saw employment drop more than 4 per cent while the Bay of Plenty had a 3 per cent fall in employment.
However, Wellington’s employment situation had returned to the level of March and the Canterbury region had a 2.3 per cent increase in jobs since the start of the crisis.
Hudson said the data suggested small business owners were running leaner operations and working more hours themselves or positioning their business to cope with any future uncertainties. ‘‘Things like adopting new technology, understanding their numbers and income, and leaning into a new, post-covid way of operating suggests small business owners know their businesses better than they ever have.’’