Small business platform Xero‘s quarterly data reveals that sales by small businesses in New Zealand fell – however, employment and salary growth remained strong.

According to Xero Small Business Insights data for the June quarter, sales fell 1.5 per cent year on year, following a decline for two consecutive months in May (-2.4 per cent) and June (-8.3 per cent), the largest monthly drop since May 2020, when the entire country was under the first Covid-19 lockdown.

“After what looked to be a more positive start to 2024, this sharp decline in sales suggests small businesses are not faring so well,” said Paul Churchman, Xero NZ head of sales. 

“The latest inflation figure from Statistics New Zealand was 3.3 per cent for the June quarter. Adjusting the nominal XSBI data to real data, this indicates small business sales are even weaker, down 4.8 per cent in the June quarter.”

Churchman also stated that the dropping sales growth is a troubling sign that small firms are under pressure from the country’s volatile economy.

In June, sales declined across all industries. Only two sectors experienced positive sales growth throughout the quarter: real estate and ‘other’ services. The retail, hospitality, and construction industries experienced the steepest quarterly drops, with retail down 11.4 per cent, and both hospitality and construction down 10 per cent.

New Zealand saw the greatest monthly sales loss in June, more than double Australia’s (-3.5 per cent) and surpassing the UK’s (-5.2 per cent).

Churchman mentioned these figures are showing small businesses are facing difficulties and need support from the local community. 

Furthermore, small business owners must maintain control over their finances and consider working closely with a financial counsellor.