Small business sales and employment growth slowed in March as Omicron peaked

0

Wellington — April 28, 2022 — Xero, the global small business platform, today released its Xero Small Business Index for March 2022, with sales and employment growth slowing from February but still ahead of March 2021.

Small business sales slowed to 3.7% year-on-year (y/y) growth in March, following four months of double-digit growth. Job growth also slowed to 2.7% year-on-year from 4.1% year-on-year in February.

Xero’s managing director for New Zealand and the Pacific Islands, Craig Hudson, says the resilience of the small business community in the face of rising cases of Omicron is remarkable.

“With the high number of Omicron cases across the country causing many small business employees to self-isolate, the slowdown in sales and employment growth is not unexpected. But it is encouraging to see that the annual growth has remained positive despite the difficult conditions,” says Hudson.

In March, all sectors except hospitality and agriculture saw positive year-over-year sales. Construction (+6.2%y/y) and professional services (+4.7%y/y) remain two of the strongest sectors in terms of sales, followed by industrials (+4.4%y /a) and retail trade (+4.3% y/y). y).

“Even with the strong overall results in March, we must remember that not all small businesses are doing well. It’s important to continue supporting your local community, especially if they’ve experienced Omicron-related staffing shortages,” says Hudson.

“As Omicron’s surge unfolds, we have consistently seen hospitality bearing the brunt of the challenges related to COVID-19, with sales down 6.6% year-on-year.

“Sales in the agricultural sector were also down 1.0% year-on-year. Interestingly, the Waikato area saw a major slowdown in sales – down 0.7% YoY in March after growing 19% YoY in February.

Wages rise with inflation

In terms of wage growth, all regions in Aotearoa recorded wage growth above 4%, with Waikato being the strongest at 4.9%.

“As we reach record levels of inflation, it’s important that employee incomes stay in line with the rising cost of living,” says Hudson.

“The challenge will be for small business owners when it comes to managing these rising costs and staying afloat in already difficult times.”

Employment growth recorded in March

For the fourth consecutive month, the strongest region for employment growth was Otago (+5.7% y/y). Canterbury (+5.0%y/y) and Wellington (+3.7%y/y) also delivered strong results while Bay of Plenty was the weakest region but still heading in the right direction at + 0.3% a/a.

The most dynamic sectors in terms of job creation were professional services (+7.0% y/y), industry (+6.5% y/y) and construction (+5.4% a/a).

“Although less than the 4.1% increase in February, we still saw jobs increase by 2.7% year-on-year, despite the high level of COVID-19 cases affecting the workforce. small business,” says Hudson.

“Hospitality jobs (-11.0% y/y) were the hardest hit by the disruption caused by the COVID-19 disease and self-isolation. This is the seventh consecutive month of negative growth for this sector.

“With the borders opening over the next few months, the hope is that the hospitality and tourism sector will begin to see some rejuvenation in the second half of 2022.”

Small Business Index Record Score

Despite Omicron’s impacts on the small business economy, New Zealand’s Small Business Index rose 20 points to 134 points in March, the highest level since the series began in January 2017.

“The very strong index result was driven by a significant 2.4-day improvement in the payment pending time for small businesses to 21.3 days – the lowest result since the start of the series,” said Hudson said.

“Although this is a very good sign, we are aware that this corresponds to the end of Aotearoa’s financial year, the busiest period for accounting.

“This has an impact on how small businesses file their results and care should be taken in interpreting the time to pay metric. We saw a similar result at the end of the previous year, which was then revised the following month. »

For more information on the March 2022 Xero Small Business Insights metrics, please see the New Zealand XSBI Update.

© Scoop Media

Share.

Comments are closed.