National sales growth slows as financial impact of Omicron spread revealed

• Business News

Seasonal spending and an extended summer holidays could not save the financial damage the rapid spread of Omicron had across Australian businesses in January.

Data revealed the Xero Small Business Index declined six points during the first month of 2022 to 86 points, a dip largely attributed to the surge in Omicron cases across the country.

The decline is a significant reduction from the high in November (107 points) and comes after two months of strong sales growth, when small businesses made the most of reduced lockdown restrictions and festive season spending.

“Looking at January’s decline after the highs of Christmas trading in November and December, there’s no doubt this Index reflects the heightened volatility many small business owners have experienced these past few months,” Joseph Lyons, Managing Director Australia and Asia, Xero, said.

Joseph continued, highlighting that the dip “was expected,” and for small businesses to remain confident on a strong bounce back.

“Xero’s data tells us that small businesses can bounce back from tough times, and with COVID-19 restrictions easing, case numbers falling and national and international travel returning, there’s cause to be optimistic.”

Job bounce back stalls

January saw a decline in job growth, falling 1.5 percent compared to this time last year (and to a rise of 1 percent in December).

Of the biggest states, NSW was hit the hardest with jobs down 2%, followed by Victoria falling 0.8 percent and Queensland down 0.7 percent compared to the previous year’s data.

Education jobs also saw a sharp decline of 13.9 percent, which according to Xero is “the largest drop in jobs for the sector since May 2020 when the first wave of the pandemic hit.”

“The fall in jobs for the education sector could reflect the still comparatively low numbers of international students in Australia as the border reopening schedule was delayed by Omicron.

“However, as Australia’s borders reopen, we’re likely to see more of these students return to Australia which should support future jobs growth later this year,” said Louise Southall, Xero Economist.

The arts and recreation (down 4.9%) and hospitality (down 4.7%) sectors also recorded a fall in jobs.

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