XSBI data shows global trend in small business sales
Small businesses have survived – and continue to face – a myriad of challenges from a global pandemic, supply chain disruptions, and now impacts of inflation and the rising cost of living. I am constantly impressed by the resilience and adaptability of small businesses as they navigate new challenges and identify opportunities.
Through our latest Xero Small Business Insights (XSBI) data, we can see the global trend of the rising cost of living impacting small business sales. At Xerocon New Orleans in August, we announced the expansion of our existing XSBI program for Australia, New Zealand, and the UK, to include quarterly data on the state of small business in the US and Canada. Our recent report, Small Business Snapshot: United States and Canada, provides insights into business performance and the impact inflation is having on US and Canadian small businesses.
We’ve published the usual metrics for Australia, New Zealand and the UK for the month of September, as well as data on the US and Canada for the three months to June including sales, time to be paid, and late payments.
Sales growth slows globally
Our XSBI data shows sales growth has generally been slowing so far in 2022 in all five of the countries we’ve reported on. This trend is in response to rising cost of living pressures, which is now a global challenge. Small businesses are experiencing lower demand for their goods and services as their customers are having to stretch their pay packets to cover rising household expenses, and this is directly impacting sales.
The September data shows an ongoing sales slowdown in Australia (+8.8% y/y), and the UK (+3.6% y/y) – the smallest rise for the UK since February 2021. Similarly, looking at the data for the three months to June in the US and Canada, small business sales growth slowed compared with the first three months of the year.
Navigating macroeconomic headwinds
In New Zealand, the September data shows signs of improved sales growth (+14.8% y/y) compared to some soft results between April and July. We’re now seeing that both New Zealand and Australian small businesses are currently managing to navigate global headwinds. They’re also feeling confident enough to be hiring staff – jobs rose 10.2% y/y in September in Australia and 8.5% y/y in New Zealand, which may suggest they’re also managing to recruit the right people in a time of talent shortages. It’s also pleasing to see that payment times have not increased in the two countries.
Overall, the experience for most small businesses right now is that profit margins are being squeezed as their expenses rise due to inflation and customers’ money doesn’t go as far as it used to. In saying that, we are hearing anecdotally from small businesses that by leaning on their peers and their advisors, they have some confidence that the storm will pass and they will get through this.
Small businesses need our support now more than ever to navigate the challenging conditions, especially as we start heading towards the holiday season.
Read more about the latest XSBI metrics in these updates:
Or visit the XSBI homepage.
The post XSBI data shows global trend in small business sales appeared first on Xero Blog.
Source: Xero Blog
