As lockdown conditions eased across the three jurisdictions, the Xero Small Business Index rose five points across October.
It means that the index is now sitting at 94 – not far below the index average of 100.
Despite the labelling of the increase as “modest” – from a previous 2021 low of 89, Xero did explain that “it provides an early indication of what can be expected after a full month of eased restrictions.
Nationally, the index showed a sales growth of 4.4 per cent year-on-year (y/y), after adjusting for base effects, which was a slowdown from +8.2 per cent y/y in September.
Despite all states seeing slower sales growth in October, Victoria was noted as continuing to record the weakest results – with a sales increase of just 0.6 per cent y/y, despite lockdown restrictions easing from 21 October.
Tasmania has weakened considerably over the month, delivering +1.9 per cent y/y sales growth, down from the +10.4 per cent y/y it recorded in September.
In contrast, NSW reported sales growth of 4.8 per cent.
Xero managing director Australia and Asia, Joseph Lyons, has conceded that the latest findings highlight the likelihood that “it will take a while for small businesses impacted by lockdowns to get back on their feet”.
“As we lead into the festive season and summer holidays, it’s really important that Australians continue their support of small businesses, shopping locally wherever they can,” he expressed.
“With density limits easing and borders reopening, it’ll also be great to see holidaymakers exploring their own backyard and supporting local tourism operators while doing so.”
Despite the lack of sales growth, Xero did report that jobs growth and wages growth are showing positive signs.
Nationwide, small business jobs rose a modest 0.1 percent y/y, adjusting for base effects in October. This slight rebound came off the back of a decline of 1.0 percent y/y in September.
But, Mr Lyons did express “we were still witnessing a two-speed economy in October”.
Western Australia (+5.1 per cent y/y) and Queensland (+3.2 per cent y/y) continue to record solid jobs growth, while the same couldn’t be said for lockdown-impacted areas.
The ACT reported -2.8 per cent y/y jobs growth, which is worse than the -2.3 per cent y/y seen in Victoria and -1.2 per cent y/y growth in NSW.
Xero economist Louise Southall has acknowledged that “it will take time for those heavily impacted small businesses to rebuild jobs, as they still deal with ongoing restrictions such as patron limits.”
She believes “the summer holiday period is a great opportunity for people to show their support for local hospitality and arts and recreation small businesses.”
Over the same period, wages nationwide rose 2.7 per cent y/y. It continues the upwards trend, after Xero had reported 2.6 per cent y/y wage growth in September and 2.5 per cent y/y growth in August.
According to the report, this puts wages almost back at their pre-pandemic average.
Emma Ryan is the deputy head of content at Momentum Media and editor of the company's legal publication, Lawyers Weekly.
Emma has worked for Momentum Media since 2015 and has been responsible for breaking some of the biggest stories in corporate Australia. In addition, she has produced exclusive multimedia and event content related to the company's respective brands and audiences.
A journalist by training, Emma has spent her career connecting with key industry stakeholders across a variety of platforms, including online, podcast and radio. She graduated from Charles Sturt University with a Bachelor of Communications (Journalism).