Small business revenue down, jobs improving in January
As we take stock of the first month of 2021, our Xero Small Business Insights (XSBI) data, released today, shows that COVID-19 continues to dominate small business operations.
I mentioned in my blog post last month that the countries that were most successful in containing the virus finished the year in the strongest position. Perhaps not surprisingly, that trend seems to be continuing into 2021, although short lockdowns in Australia and New Zealand have caused some small businesses to either alter their usual business practice, or close for the duration of the lockdown.
It’s pleasing to see that the New Zealand government has adapted quickly to provide assistance to businesses affected by short lockdowns, with the Resurgence Support Payment announced last week. And, just this week we’ve seen the Victorian government offer a support package for businesses impacted by the recent ‘circuit-breaker’ five-day lockdown. The impact of this kind of support is huge for affected small businesses.
Let’s take a closer look at what we saw in our XSBI January 2021 data.
Small business revenue down in New Zealand, Australia and the UK
Small business revenue in January 2021 was down year-on-year in all three countries (New Zealand, Australia and the UK). In the UK, having been in lockdown since early January, small business revenue was down 9.3% year-on-year.
In New Zealand, the general slowing down of small business revenues continues with a 6.0% fall year-on-year. And in Australia, the slight 2.2% rise in revenue that we saw in December has now become a decrease of 0.9% year-on-year. This performance may have been impacted by the reductions in JobKeeper and JobSeeker at the start of January.
Jobs increase in the UK, affected by seasonal factors in Australia and New Zealand
Despite the fall in revenue, small business jobs in the UK increased by 1.5% in January from December, to sit at -2.4% below pre-crisis levels. This figure is likely supported by the furlough scheme, which continues to underpin those industries that are unable to open.
In Australia and New Zealand, small business jobs fell 3.3% and 4.7% in January 2021 respectively. However, these monthly figures are potentially impacted by seasonal factors due to the annual summer holiday period. By comparing jobs to the same week in January 2020 we remove the impact of that seasonality and see that small business jobs in Australia are up 2.0% and 1.9% in New Zealand.
January’s key findings
In New Zealand, small business revenue fell 6.0% year-on-year – this is the first month since May 2020 that New Zealand small businesses have experienced a year-on-year drop in revenue. Jobs are up 1.9% vs. the same point in 2020.
Small business revenue in Australia fell slightly – January 2021 revenue was 0.9% lower than January 2020. This follows a 2.2% rise in the year to December 2020. Jobs are up 2.0% vs. the same point in 2020.
In the UK, small business revenue fell 9.3% year-on-year, and jobs increased by 1.5% from December, to sit at -2.4% year-on-year.
Read more about our monthly metrics for January in our XSBI updates:
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Source: Xero Blog
