As we head into the holiday period and reflect on an extraordinary year, small business owners all over the world will be hoping for a return to some sort of normality in 2021.
Throughout 2020, we’ve been working to understand the impact of the COVID-19 pandemic on small businesses. Under the Xero Small Business Insights (XSBI) program we have published monthly metrics on the health of the sector in three of our regions (Australia, New Zealand and the UK). These insights are drawn from hundreds of thousands of our subscriber records (anonymised and aggregated for privacy) based on actual transactions and delivered in close to real-time.
We’ve used these insights to provide valuable advice and support to government and policy makers to support small business recovery. In addition, we commissioned a survey-based study through Forrester Consulting, who released an independent paper that provides practical advice to small business owners on how to navigate and thrive in the pandemic.
Our XSBI data, which we are releasing for November today, shows we see the bumpy recovery we expected, as changing trading restrictions continue to impact the business landscape.
The good news is we can all support the recovery over the next couple of weeks by simply choosing to ‘shop small’ over the festive season. Purchasing those last minute gifts from small businesses can go a long way to help support the small business community and bring some much needed holiday cheer.
The November XSBI results highlight once again how much impact trading restrictions can have on small business, as we saw much of Australia come out of lockdown (barring a brief spell for South Australia) and restrictions increasing once again in the UK.
Revenues are strong in New Zealand and Australia
It’s really encouraging to see that small businesses in New Zealand and Australia continue to see increases in business revenue year-on-year. In New Zealand in particular, limited restrictions have allowed positive revenue growth over the past six months, at an average of 5.4%, similar to the average growth we saw in late 2019/early 2020.
In Australia, we saw the lifting of restrictions in most states, contributing to year-on-year small business growth of 1.7%. This resilience will be heartening news for business owners in the UK, who are feeling the effects of the latest restrictions with revenue down 7.9% in the 12 months to November. Revenue improvements in New Zealand and Australia lead us to be cautiously optimistic that once restrictions in the UK ease, they may experience the same bounce back in sales.
Jobs growth reflects revenues
Unfortunately, the small rise in UK small business jobs that we saw in October did not continue in November. Jobs fell 0.5% year-on-year and are now 4.2% lower than they were pre-COVID. However, jobs continue to slowly increase in New Zealand and Australia, despite the end of the wage subsidy in New Zealand and a significant rollback in Australia. Remarkably, small business job levels in both countries have returned to, or exceeded, pre-COVID levels.
November’s key findings
In New Zealand, small business revenue is up 3.2% year-on-year, and has now had six months of positive growth. The six-month revenue growth average of 5.4% is around the same growth rate we saw in the six months prior to the pandemic. Jobs are up 2.4% month-on-month and are now exceeding pre-COVID levels.
Australia recorded a 1.7% increase in small business revenue year-on-year, despite a brief tightening of restrictions in South Australia. Small business jobs increased 1.5% month-on-month and are now back around pre-COVID levels.
In the UK, much of the region going back into lockdown contributed to negative small business revenue growth of -7.9%, only a slight improvement on October’s result. Jobs fell 0.5% month-on-month and are now 4.2% lower than they were pre-COVID.
Read more about our monthly metrics for November in our XSBI updates:
Or, visit the XSBI page.