Xero : 24/06/2021 - New Zealand small business sales and jobs grow in May

MEDIA RELEASE

New Zealand small business sales and jobs grow in May

Hospitality sector experiences strongest month since pandemic hit

Wellington - 24 June, 2021 -Xero, the global small business platform, today released its Xero Small Business Index for May 2021, which shows improvements in both sales and jobs figures for Kiwi small businesses.

Typically, the Index compares year-on-year (y/y) data to reveal how the small business economy is fairing. However, as the data from May 2020 was significantly impacted by the pandemic, comparisons have been made using annualised two-year growth to account for base efects.

Using this adjusted approach, small business sales across New Zealand grew 6.2% y/y in May 2021, with the strongest performances seen in retail trade (+8.8% y/y), construction (+7.6% y/y) and hospitality (+7.5% y/y).

Jobs growth also rose 4.7% in May, with the strongest results regionally in Northland (+7.1%) followed by Waikato (+6.1%), Hawke's Bay and Canterbury (both +5.7%).

Xero's Managing Director for New Zealand & Pacific Islands, Craig Hudson, adds that in May, businesses were paid almost half a day faster and wages were up 3.2% y/y.

"May XSBI data shows small business owners across New Zealand should feel optimistic, even those in the hospitality sector which was hit hardest by the pandemic.

"Afer months of negative results, the hospitality industry has started to see an upswing. May 2021 hospitality sales are up an adjusted 7.5% y/y compared to the 4.2% y/y rise in April 2021.

"Jobs are also heading in the right direction, still down 1% y/y overall but up from April's 5.9% y/y fall. Together this is the most positive month for the sector since the first COVID-19 lockdown in April last year.

"While it's looking promising, small businesses in the hospitality sector have a long way to go to get back to pre-pandemic levels of growth and still face many challenges, including those around labour shortages. They are still in desperate need of support right across the country," says Hudson.

Small Business Index indicates above-average performance in May

For the fourth month running, the Small Business Index has remained above 100 at 109 points, signalling stronger than average small business activity despite slower sales and wages when compared to April 2021.

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"It's encouraging to see the Small Business Index remain high for the majority of 2021. As we continue to recover from the impact of COVID-19, we need to remain supportive of the local small business economy," says Hudson.

"The efects of the Trans-Tasman bubble, for example, seem to be infusing the local retail, tourism and hospitality sectors with increased sales. We hope to see these trends continue as the small business sector stabilises and returns to the consistent growth we saw before the pandemic struck."

ENDS

About Xero

Xerois a cloud-based accounting sofware platform for small businesses with over 2.7 million subscribers globally. Through Xero, small business owners and their advisors have access to real-time financial data any time, anywhere and on any device. Xero ofers an ecosystem of over 1,000 third-party apps and 300 plus connections to banks and other financial partners. In 2020 and 2021, Xero was included in the Bloomberg Gender-Equality Index and in 2020, Xero was recognised by IDC MarketScapeas a leader in its worldwide SaaS and cloud-enabled small business finance and accounting applications vendor assessment.

About Xero Small Business Insights

The Xero Small Business Insights (XSBI) program provides analysis of the sector's health, with metrics based on anonymised, aggregated data drawn from hundreds of thousands of subscribers in partnership with AlphaBeta Australia (part of Accenture). 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

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series of specialised monthly metrics which analyse the impact of COVID-19 on the small business sector.

About Accenture

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialised skills across more than 40 industries and all business functions - underpinned by the world's largest delivery network - Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders.

Note to the editor

Previous iterations of the XSBI data have listed snapshots of data from the time it was captured. Some of these historical data points change as bookkeepers and accountants finalise their clients' accounts, which can impact the specifics of the percentages.

Contact

Natalie Benning

Head of Communications - NZ

[e-mail]

021 026 19604

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