New data shows that small-business jobs continue to grow above pre-crisis levels despite revenue declining amid a more subdued Christmas period.
According to the Xero Small Business Insights (XSBI), compiled in partnership with research firm AlphaBeta , the number of jobs in small the small-business sector grew by 1.9 per cent on a month-on-month basis on December, three per cent above pre-crisis levels. The research reveals that these gains were bolstered by casual employment which increased by 36.8 per cent since April and which is now 3.8 per cent above pre-crisis levels.
The hospitality sector recorded a 5.3 per cent month-on-month rise in small-business jobs, and is now one per cent above pre-crisis levels, the first time jobs have been above March 2020 levels for this sector. Manufacturing (+8 per cent), retail trade (+7 per cent), health care (+7 per cent), and construction (+4 per cent) also all recorded jobs above March 2020 levels.
The 5.6 per cent fall in South Australian small-business jobs during November 2020, that coincided with a three-day Covid lockdown in Adelaide, was reversed in December. Victoria has also recorded strong post-lockdown small-business jobs’ growth, now up 13.9 per cent from the second lockdown trough.
“The latest Xero Small Business Insights figures underscore the resilience of the small-business sector and its crucial contribution to the economy as the country’s number one employer,” Trent Innes, Managing Director Australia and Asia, Xero said.
“It is encouraging to see the continued upward trajectory in small-business recovery as the sector records another month of jobs growth. It’s especially pleasing to see jobs in hospitality in positive territory, having been one of the hardest-hit industries.
“The decline in revenue growth is a reminder that the road to recovery isn’t linear and that small businesses will be navigating through peaks and troughs,” Innes added. “With revenues dipping while the sector is still hiring, small businesses will need ongoing support.”
Small-business revenues in December 2020 were 2.7 per cent lower than a year ago. The industry breakdown of this result points to a more subdued Christmas period for small businesses than in 2019.
The three sectors with the closest links to this period all recorded year-on-year revenue declines – retail trade (-5 per cent), hospitality (-17 per cent) and arts and recreation (-22 per cent). Western Australia was the only state to record year-on-year revenue growth in December (+0.8 per cent). Victoria recorded a 4.3 per cent year-on-year revenue decline, but this is now only 1.5 per cent points below the national result as the state catches up with the rest of the country after its second lockdown.
“Business conditions have vastly improved for most industries but small businesses are still facing uncertainty over the year ahead as we await the national vaccine roll-out,” Innes said.
“As witnessed in Adelaide and then in Sydney, disruptions caused by short-notice lockdowns can impact both trading conditions and general confidence. It will be important for small businesses to keep a close track of their cash flow position throughout 2021 and to work closely with their advisor,” Innes concluded.
This article was first published on Inside Small Business, a sibling website to Inside Franchise Business Executive.
