Xero : 25/02/2021 - New Xero data reveals Australian small business revenue flattened but jobs grew in the year to January

MEDIA RELEASE

New Xero data reveals Australian small business revenue flattened but jobs grew in the year to January

Seasonal factors meant small business jobs fell during the month but they still ended January 2% above year ago levels

Melbourne - 25 F​ ebruary, 2021 -​X​ero,​ t​ he global small business platform, today released new data on the health of Australia's small business sector in January 2021 from its Xero Small Business Insights (XSBI) program, in partnership with Accenture.

Based on anonymised and aggregated data of hundreds of thousands of customer records, the latest XSBI analysis reveals revenue growth has continued to slow in line with the tapering of major government support policies. Small business jobs remain just above pre-crisis levels despite a seasonal drop.

Revenue growth slows but Victoria bounces back

Small business revenue in Australia was 0.9% lower in January 2021 compared to January 2020. This follows a 2.2% rise in the year to December 2020. While the result is the fourth consecutive month of slower and below-average growth, it is the first year-on-year fall in revenue since May 2020.

This January result comes against the backdrop of a reduction in national income as two key support payments - JobKeeper and JobSeeker - were reduced at the start of the month.

Industries experiencing the largest declines in revenue continue to be arts and recreation (-10% y/y) and hospitality (-5% y/y), although both of these results were an improvement on December's revenue declines.

New South Wales (-1.9% y/y) and Victoria (-1.3% y/y) both recorded year-on-year dips, which were partially offset by gains in Western Australia (+4.5%), Queensland (+1.8%) and South Australia (+0.2%).

Despite a slide this month, Victoria has almost narrowed the gap in revenue compared to other states as the ongoing impacts of the second lockdown in 2020 have eased. Victorian revenue remains only 0.4% points below the national revenue result and was better than NSW (-1.9% y/y).

Trent Innes, Managing Director Australia and Asia, Xero said: "Victorian small businesses were dealt a particularly rough hand in 2020 so it's really pleasing to see the revenue gap having almost closed in January, a period of minimal restrictions. February's five-day snap lockdown in the state may be cause for change, however, and we will need to await next month's figures to reveal the extent of its impact."

Summer break sees jobs fall

Small business jobs fell 3.3% month on month in January, with this pattern seen across all industries and in all states and territories. It is consistent with job movements observed during the year prior as a result of seasonal changes. T​ he drop is likely due to quiet summer trading and temporary changes in reporting practices, and is consistent with job levels observed during the year prior - as a result of seasonal changes.

Despite this, jobs ended 2% higher in January than in the equivalent week a year ago and ended the month 0.1% above pre-pandemic levels.

"The seasonal fall in jobs is something that happens every year. Small businesses often close for an extended period over summer, while some businesses temporarily stand-down employees in response to quieter trading, especially casual workers," said Innes.

"Importantly, the jobs outlook still remains positive with small business jobs ending January 2% above the equivalent week in 2020. This provides a clearer picture of what is actually happening."

For further information on the January metrics, please refer to the XSBI Updateh​ere.

ENDS

Media Contact

Xero Australia Jessica Brophy [phone]

About Xero

Xero is a cloud-based accounting software platform for small businesses with 2.45 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 offers an ecosystem of over 800 third-party apps and 200 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 byI​DC MarketScape​ as 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 on the sector's health, with its 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 typically have a far smaller sample size, and more frequently updated than much of the data on small business. Xero is currently producing a series of specialised monthly metrics, providing a view of the impact of COVID-19.

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.