Jobs growth rises, as sales slow for Australian small businesses

• Business News

The Xero Small Business Index has released it’s latest data on the health of Australia’s small business economy during July, revealing one of the strongest jobs growth results since August 2021.

Jobs rose 4.1 percent y/y in July – above the long-term average of 3.0 percent y/y for the Xero Small Business Index series, meaning jobs growth has now been positive for three consecutive months.

Looking at the states, July saw Tasmania record positive jobs growth (at 1.8% y/y) for the first time in 7 months while New South Wales led all states at 7.7 percent y/y.

All industries reported positive jobs growth, including hospitality (+8.6% y/y), which had recorded falls in jobs for the previous six months. Information media and telecommunications (0.8% y/y) and agriculture (0.2% y/y) reported the lowest figures, while arts and recreation led all industries at 11.1 percent y/y, a significant result given a tough couple of years due to COVID-19 restrictions.

“Small businesses remained resilient in the face of inflation and other supply chain challenges according to the July index. In fact, we’ve seen the strongest jobs growth in almost a year, even across industries like hospitality and agriculture, which have recently struggled to find talent,” said Joseph Lyons, Managing Director Australia and Asia, Xero.

“While inflation is impacting small businesses globally, our data shows that Australian small businesses are faring slightly better compared to those in New Zealand and the United Kingdom in terms of sales. While this doesn’t mean it’s smooth sailing for local small businesses – as most can attest to – it’s promising to see an overall above-average result, especially for sectors that have been doing it tough,” says Lyons.

While the employment rate hit record numbers, sales growth slowed to 7.5 percent y/y, from 11.4 percent y/y in June.

The predicted cause of this fall is the rise of cost of living pressures faced by many Australians. As prices rise faster than wages, causing a flow of effect when it comes to spending in small businesses across the country.

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