Sales growth for Kiwi small businesses slow, but heading in right direction

Wellington— 30 October, 2025 —Xero, the global small business platform, today released its Xero Small Business Insights (XSBI) for Aotearoa New Zealand showing that while the small business sector continues to struggle there are some positive signals of improvement.

For the first time in two-and-a-half years sales rose for the quarter, though at 1.9% year-on-year (y/y) this is still a decline in inflation-adjusted (real) terms.

Bridget Snelling, Country Manager - Aotearoa New Zealand at Xero said while these results are well behind the long-term national sales growth average of 6.2% y/y, there is reason for hope beyond what has been a difficult trading environment.

“The last four months have shown positive sales growth, the longest consecutive run since mid-2023. Following the Reserve Bank of New Zealand’s interest rate cuts, the XSBI data suggests extra spending is gradually flowing through to small businesses.”

Modest quarterly sales growth was seen in Auckland and Wellington, bucking a trend of recent underperformance by finally recording sales increases at +0.6% y/y and +0.4% y/y respectively. Meanwhile, Canterbury (+4.3% y/y) and Otago (+6.3% y/y) continued to be the two best performing regions for sales.

Jobs* in small businesses were 1.2% lower than a year ago in the September quarter, after a similar fall in the June quarter.

Snelling said that the divergence of jobs and sales results is likely due to the lagged nature of employment: “Businesses will want to see more sustained levels of sales growth before building back confidence to increase their workforce.”

Regionally, Canterbury was the only location to have positive jobs growth in the September quarter, reflecting its strength in sales growth.

Agriculture hot streak cools, manufacturing and professional services lead the way

The stand-out industry performer of late has been agriculture, recording double digit growth for three consecutive quarters. However this didn't continue in the September quarter, with sales growing only 3.3% y/y, down from 11.1% y/y in the June quarter.

“Though still growing, it’s a concern to see agriculture sales slow as it has been one of the few bright spots in the New Zealand economy this year. The solid sales performance earlier in the year has supported jobs which were up 0.8% year-on-year, one of only three industries XSBI tracks to record positive jobs growth in the September quarter,” said Snelling.

Snelling said the star performers for 2025 have been the manufacturing (+2.9% y/y sales and +0.6% y/y jobs) and professional services (+2.4% sales and +1.8% y/y jobs) industries, having recorded at least three consecutive quarters of positive sales and jobs growth, something that has eluded other industries.

Meanwhile, industries including construction, hospitality and retail continued to be challenged, recording sales growth results of -0.7%, 1% and 2.9% y/y respectively.

Construction was particularly weak, with jobs lower than a year ago for seven consecutive quarters. The September quarter showed jobs down 3.9% y/y. This was matched by a weak jobs result in hospitality (-3.9% y/y) and retail also saw negative jobs growth at -1.2% y/y.

With Stats NZ data showing these three sectors as the biggest employers of young people, Snelling said the XSBI results affirm that conditions remain tough in the job market, particularly for youth, with fewer opportunities out there.

“While we’re not out of the woods yet, there are some hopeful signs on the horizon and the Christmas period will be telling. One way we can all bring some community spirit is by making an effort to shop local and support small businesses this festive season.”

ENDS

*Note to editors: The COVID-19 pandemic caused significant volatility in many datasets, including XSBI. To account for this the XSBI jobs data series previously had a 'COVID-19 adjustment' made to it. Sufficient time has now passed since the end of the pandemic period to remove this temporary adjustment. As a result, historical XSBI jobs growth data has been subjected to larger than usual revisions in this latest publication.

Media Contact

Xero Aotearoa New Zealand | Kristen Barrett | +64 22 064 2924 | Kristen.Barrett@xero.com

About Xero

Xero is a global small business platform that helps customers supercharge their business by bringing together the most important small business tools, including accounting, payroll and payments — on one platform. Xero’s powerful platform helps customers automate routine tasks, get timely insights, and connects them with their data, their apps, and their accountant or bookkeeper so they can focus on what really matters. Trusted by millions of small businesses and accountants and bookkeepers globally, Xero makes life better for people in small business, their advisors, and communities around the world. For further information, please visit xero.com.