Our June 2020 Small Business Insights (SBI) show small business revenue in New Zealand has rebounded to 2019 levels while employment figures have dropped slightly after an earlier recovery in May. The data also showed that, in terms of revenue and employment, New Zealand small businesses fared better than their Australian and UK counterparts.
New Zealand revenue recovered in June
With New Zealand entering its strict lockdown in late March, small business revenue in April fell sharply to be 39% lower than a year ago. However, as restrictions eased, small business revenue recovered somewhat to be 17% down in May. This revenue recovery continued through June, with June 2020 revenue on par with revenue in June 2019.
Craig Hudson, Managing Director for New Zealand and Pacific Islands at Xero, says while it’s too early to celebrate a lasting recovery, the data is promising.
“This revenue recovery shows what’s possible when New Zealanders spend locally. It's important to note though that the data is an average across all small businesses. While some businesses are doing extremely well post-lockdown, which is helping drive revenue back to 2019 levels, others are still hurting and need as much support as possible,” says Hudson.
This was particularly true for certain regions in New Zealand and while most major regions across the country have seen year-on-year revenue improvements in June, Queenstown is still lagging. Revenue growth in the popular tourist destination was down -6.4% compared to June 2019. However, this is a significant improvement compared to Queenstown’s -59.7% year-on-year drop in the month of April.
Small business revenue in Auckland was also down (-2.1%), but Canterbury (+3.9%), Northland (+2.8%), Wellington (+2.2%), Hawke’s Bay (+1.6%), and the Waikato (+1.1%) all saw average small business revenue grow year-on-year in June.
Employment figures correlate with wage subsidy changes
After a modest recovery in the number of jobs in the small business sector post-lockdown, the number of jobs across Kiwi small businesses dropped by 2.2% between 10 June and the end of June. The drop in jobs in the second part of the month coincided with the tightening of eligibility for the wage subsidy. However, New Zealand is leading the small business employment recovery compared to Australia and the United Kingdom with the small business sector having only 3.6% fewer jobs than pre-crisis levels. This compares to 6.8% fewer jobs in the Australian small business sector and 8.5% in the UK.
“Small businesses are more than just numbers. They are about livelihoods and people. At the moment they are doing it tough. Losing a job can be devastating, so we need to do all we can to support them and help them through this incredibly challenging time.
“Although we are doing better than many expected, now is not the time for Kiwis to be complacent in supporting small businesses. For those who can, spending with locally-owned small businesses and paying your bills on time is vital,” concludes Hudson.
To see more of the comparative insights across Australia, the UK and New Zealand please visit.
About Xero Small Business Insights
The Xero Small Business Insights program provides analysis of the sector’s health, with metrics based on anonymised, aggregated data drawn from hundreds of thousands of subscribers. The result is a picture of business conditions that’s more accurate than most private surveys, which have a far smaller sample size, and more frequently updated than other New Zealand data on small business. Xero is currently producing a series of specialised monthly metrics which analyse the impact of COVID-19 on the small business sector.