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Weighed down by negative growth in NSW, jobs growth across the Australian small-business sector in August rose just 1.3 per cent on the year before, making it the slowest period of growth in more than 10 months.
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Small-business job growth tumbles to 10-month low
04 October 2021
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Xero on Thursday released the results of its latest small-business index, which fell by nine points to 92 in August, mired by slow jobs growth across the country, and negative growth of -2.3 per cent in NSW.
August’s slowed small-business jobs growth follows a year-on-year drop of 0.1 per cent in July. In Victoria, jobs growth swelled modestly, up 1.9 per cent, while growth in Western Australia led the country with a rise of 6.9 per cent.
The ACT, meanwhile, recorded the sharpest decline, falling from 6.1 per cent in July to 3.2 per cent in August.
Joseph Lyons, managing director of Australia and Asia at Xero, said ongoing restrictions across the country saw yet another tough month for the sector.
“With more than half the Australian population under stay-at-home orders in August, it was yet another tough month for small businesses as jobs growth slowed to its lowest result since October last year,” Mr Lyons said.
“The Xero Small Business Insights data does provide some green shoots of hope, with an increase in sales offsetting the weakened jobs growth,” he said. “Time and again, small businesses demonstrate their adaptability and resilience.”
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Xero economist Louise Southall said that jobs growth remains skewed by industry, and that August’s data offers testament to that.
“The slowdown in jobs growth is not uniform across Australia,” Ms Southall said. “Small businesses in hospitality and arts and recreation are once again being hit much harder than those that can revert to working from home, such as professional services.
“Similarly, there’s a stark contrast between states, as Western Australia continues to post jobs growth around 7 per cent year-on-year, while in NSW jobs are now 2.3 per cent below where they were in August 2020.”
The results of Xero’s August small-business index emerge alongside recent government announcements, detailing an end to both business and household support payments across the states.
Sales continued to grow through August, which saw a year-on-year surge of 6.4 per cent, up from the 4.2 per cent jump recorded in July, even as lockdown restrictions ensued. However, the index revealed that a strong collective performance masked marked state differences.
Results were dragged by weak performances in NSW and the ACT, which recorded year-on-year growth of 3.1 per cent and 3.3 per cent respectively.
Western Australia, meanwhile, recorded strong year-on-year growth of 12.8 per cent, followed closely by Queensland, where year-on-year sales were up 10 per cent for the month.
Even though Victoria spent much of the month under some form of lockdown restrictions, the state’s small businesses recorded year-on-year sales growth of 6.7 per cent, up from 5.5 per cent in July.
August also saw South Australia bounce back from its July lockdown, as it recorded year-on-year sales growth of 9.3 per cent, up from the 2.5 per cent growth seen across the state in July.
The hospitality, arts and recreation industries continued to suffer through August, falling 11.4 per cent and 6.5 per cent year-on-year respectively, while the healthcare and real estate services industries came out on top, recording year-on-year growth of 14.8 per cent and 11 per cent respectively.
The average time it took for small businesses to be paid was up for the second month in a row through August, up 0.5 days to 23.7 days in August, the highest the metric has been since September last year. Xero’s late payments measure also rose through August, to 7.2 days
Wages growth across the sector, however, remains unchanged, rising 2.5 per cent through August, as it did in July. Wages growth, though, is still down on pre-pandemic growth levels of around 3 per cent.
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