The latest Xero Small Business Index has risen nine points in March 2022 to 118 points – the highest it’s been since June 2021, albeit being lower than March 2021.
The result is a positive marker for the health of the small business economy and indicates that, across the board, it is making headway in a return to normality, according to Xero managing director for Australia and Asia, Joseph Lyons.
“The latest data gives us a glimpse into the new normalcy for small businesses – and it’s a far healthier reality. While many are still struggling to either find staff or schedule around isolation periods, sales growth continues to be strong across the board. As we make headway into the last quarter of the financial year, this shows promising outcomes for even those industries that have been slower to recover,” he said.
“With travel – both domestic and international – back on the agenda and restrictions continuing to ease, we hope to see more small businesses find their feet and these figures continue to rise,” said Lyons.
Sales were up 10.7% year-over-year in March, a slowdown from the 16.6% February result. However, jobs fell 1% year-over-year, down from +0.1% in February, continuing the weakening trend of the last seven months.
The continuing trend of stagnating wages growth is an anomaly for the Australian market. Small
business wages in Australia are growing slightly faster than they were a year ago (3.2% year-over-year March 2022 versus 2.9% March 2021), reflecting tighter labour markets and a lack of international talent.
Natural Supply Co in Geelong, which sells eco-friendly, plastic free, vegan and organic products, is positive about the road ahead. “We are feeling good about the remainder of 2022, following a drop in customers visiting the shop in the leadup to the term one school holidays due to families isolating and customers avoiding leaving the house as much as they could before the holidays,” co-founder and director, Celeste Robertson said.
“Despite this, we saw a 13% increase in sales in April 2022 versus 2021. We feel optimistic about the rest of the year, and hope the gentle growth continues. It is worth noting that the growth is, in part, due to diversifying our range of products, and growing our ethical fashion offering. This collection has been selling well, which accounts for a portion of the increase.”
Natural Supply Co has a small team with just one full-timer and four casuals, and the business has been fortunate to avoid the staff issues that many other businesses have faced with Omicron.
“We got through our busy Christmas season with no staffing issues, but over the Christmas/New Year period, we did lose two team members for a week at a time. Luckily, it was a quiet period for us, and they were back to 100% and able to return to work after the week off. Recently we’ve had another team member need a week off to stay home with her kids, who picked up Covid at school. Again, we were able to manage her absence comfortably,” Robertson said.