The Xero Small Business Insights (XSBI) data for August shows New Zealand small business revenue continued to grow despite the Auckland lockdown, but employment figures fell.
Revenue for New Zealand small businesses was 4% higher in August 2020 compared to the same time last year, marking the third consecutive month of positive revenue growth for the small business sector.
Outside of Auckland, revenue has continued to perform well with the exception of Queenstown, which is still heavily impacted by the absence of international tourism.
However, small business jobs fell 1.4% in August compared to July and are now 2.9% below their pre-crisis level.
Revenue dips in Auckland, remains steady nationwide
In Auckland, the second Alert Level 3 lockdown resulted in small business revenue falling by -4.4% year-on-year.
However, all other regions saw an improved revenue figure year-on-year with the exception of Queenstown (down 10.8%).
The second lockdown in Auckland, coupled with the continuing challenges facing Queenstown, seem to have contributed to the ongoing impact on the hospitality sector’s revenue which deteriorated in August to be 9% down year-on-year.
Overall though, revenue growth was stable across most industries with many seeing significant year-on-year revenue growth in August including rental and real estate (11%), manufacturing (11%) and construction (9%).
It is encouraging to see overall small business revenue increase across New Zealand, with the regions performing well.
Employment across New Zealand dips in August
Jobs remain down on pre-crisis levels across the country. Small business jobs fell 1.4% in August and are now 2.9% below their pre-crisis level.
Despite this, New Zealand has continued to see the smallest job losses compared to Australia and the United Kingdom, even with losses over August.
Jobs in hospitality small businesses are down 13.3% on pre-crisis levels, having declined 5% during August. Regionally, Queenstown recorded the largest drop in employment figures from pre-crisis, with jobs down -9% at the end of August.
And Auckland saw employment figures drop to -4.3% below pre-crisis figures as a result of the shift back into Alert Level 3.
Waikato (-4.9%), Northland (-4.4%), Bay of Plenty (-3%) and Hawke’s Bay (-2%) also recorded reduced job figures between March and August.
However, Wellington has seen jobs return to the March 2020 level while the Canterbury region saw a 2.3% increase in job figures since the start of the crisis.
The relative stability of revenue in the small business sector compared to job figures suggests small business owners may be running leaner businesses and working more hours themselves or positioning their business to cope with any future uncertainties.
But the second lockdown in Auckland has shown how quickly things can change, and the upcoming September data will show what impact New Zealand’s wage subsidy tapering off will have on the small business sector.
To see more insights about this month’s data, please see our August update, and if you’d like to see comparative insights across Australia, the United Kingdom and New Zealand, please see our XSBI website.