The latest data, released at the end of July, makes a cross-country comparison of the relative performance of small businesses in New Zealand, Australia, and the United Kingdom.
This is the first time this data has made a cross-country comparison, and it’s particularly insightful during this pandemic period, where countries are at very different stages in terms of a pandemic response.
In Australia, the data paints a minor recovery in employment and revenues. Australia saw larger initial falls in small business jobs, but small businesses have begun re-employing and revenues are also above the low point. This is in contrast to a stronger rebuilding in New Zealand and modest improvement in revenue in the United Kingdom, which has not yet at its lowest point for employment outcomes.
Small business revenue in Australia down 10%
New Zealand recorded a sharp revenue fall in April to be 39% lower than a year ago, as the country entered level four lockdown in late March. As restrictions have eased, returning to level one by mid-June, revenues have rebounded strongly to now be similar to June 2019 levels. However the return to a temporary lockdown in August could have further implications in future months.
In contrast, Australia saw the smallest fall of the three in revenue in April, although it was still down 10%. The subsequent rebound has also been less pronounced than New Zealand, despite also easing restrictions, with revenues 8% below year ago levels in June.
Rehiring underway in Australia
Different wage subsidy approaches in the three different countries greatly impacted staff retention, with Australia the hardest hit, experiencing a 12.1% decline in jobs between mid-March and mid-May. On a positive note, firms started to rehire in June, as lockdowns eased, with jobs increasing 6% between mid-May and the end of June. Initial job losses in the United Kingdom were less than Australia, down 4% between March and May.
Employment conditions have improved in Australia since the national lockdown ended. However, both employment and revenue remain below pre-crisis levels. Small business jobs rose 6% between mid May and end of June amid easing trading restrictions across the country.
However, there is still some way to go before jobs return to pre-COVID levels. This data also does not yet show the impact of Melbourne entering a second stage lockdown.
Revenue was less responsive
Small business revenues in Australia remain 8% lower than a year ago – similar to May, but an improvement on the 10% trough in April. Some businesses have been able to return to pre-COVID trading conditions quicker than others.The industry breakdown of revenue shows hospitality and arts and recreation are still the hardest hit, with revenue remaining 22% and 31% lower than a year ago respectively.
The standout sector in June was manufacturing, where revenues were actually 9% higher than a year ago in June. This is great news for Australian manufacturers who will be hoping they can continue this recovery trend helped by a competitive sub-US $0.70 Australian dollar.
Looking ahead, the big question mark for Australia is around the impact of the return to lockdown in Victoria and the tightening of some hospitality trading rules in New South Wales. These are the two biggest states and it is likely that we will see some negative impact on Australian small businesses performance next month as a result of an increase in local transmission COVID-19 cases.
To see more of the comparative insights across Australia, the UK and New Zealand please see our latest media release.