Global small business platform Xero has unveiled its latest quarterly Xero Small Business Insights report. The report shows overall SME performance improvements throughout the 2024 June quarter.
Sales this quarter averaged 3.9 per cent year-on-year (YoY), up 0.1 per cent from the previous quarter. However, a decline in sales in June marked the first sales decline since January 2021, suggesting complex operating conditions for SMEs in coming months.
Jobs growth remained strong, with June seeing the largest rise in small business hiring since October 2022 at 5 per cent. Xero recorded significant job growth variation across industries and regions in the June quarter, with Western Australia (+6.9 per cent YoY), South Australia, and Queensland (both +5.3 per cent YoY) recording the most growth.
Small business hiring in Tasmania and the ACT increased the least, at +2.0 per cent YoY and +1.3 per cent YoY respectively. Public administration (+9.1 per cent YoY) and healthcare (+8.8 per cent YoY) led industry gains, while hospitality continues to bring up the rear with a decline of -0.5 per cent YoY.
Wages growth in the June quarter averaged 2.9 per cent YoY, below the long-term average of 3.0 per cent YoY. It seems that real small business wages continue to lag behind the 4.0 per cent YoY inflation rate.
According to Xero Economist Louise Southall, “Softening wages growth suggests small businesses may be managing the jobs and sales mismatch by offering smaller pay rises to employees.”
Finally, payment times improved ahead of the EOFY. Small businesses waited an average of 21.3 days to be paid, as opposed to 22.5 in March.
The improvement in payment times is likely a large contributor to the jump in the Xero Small Business Index, from 121 in the March quarter to 142 points.
Theo Konstantas, Sales Director at Xero Australia, hopes to see sales performance increase in the coming months, with stage three income tax cuts boosting millions of Australians’ disposable income.
