Global small business platform Xero has released its latest data on their Small Business Index, showing small businesses are continuing to grow in terms of jobs and sales, despite rising inflation in Australia.
In early 2022, Xero’s small business survey revealed that over half of the small businesses surveyed (53%) said they were performing about the same as they were before the pandemic. In fact, while 32 percent of small businesses still considered COVID-19 as a threat to their business for the year, they were optimistic that conditions will be better than previous years.
Data collected shows that sales and jobs growth in small businesses continues to rise, a strong indication that businesses are continuing to rebuild after 2 years of uncertainty.
According to their latest data collection, Xero revealed that sales rose 16.3 percent in August – the largest rise since February 2022. This was led by arts and recreation (+47.1% y/y) and hospitality (+41.3% y/y) – two of the industries that struggled the most during the pandemic.
Jobs rose 6.6 percent y/y, which is more than double the average growth for the Xero Small Business Insights series, and the strongest result since August 2021.
Joseph Lyons, Managing Director APAC, Xero, said: “The August result demonstrates that small businesses are successfully navigating a period of increasing inflation and cost of living pressures. It’s also encouraging to see post-pandemic recovery for the hospitality and arts and recreation industries – two industries that were the hardest hit over the last couple of years.”
The Index has revealed four consecutive months of positive jobs growth, which is promising to see in such a tight labour market. It is a strong indication of the strength, resilience and health of small businesses across the nation.”
What does this mean for small businesses in 2023?
Overall, the data collected in the Xero Small Business Index is positive and indicates that small businesses are continuing to grow, despite rising inflationary pressures. This is a good sign for the Australian economy as a whole, as small businesses make up a large proportion of GDP.
How can small businesses navigate inflation?
Some practical tips for small businesses navigating inflation include:
– Review your business model and make sure your pricing is aligned with your costs
– Keep an eye on overall economic conditions and adjust your business strategies accordingly
– Look for opportunities to increase productivity and efficiency in your business
– Focus on building strong relationships with your customers and suppliers.
If you are a small business owner, it is important to keep an eye on your costs and pricing, as well as the overall economic conditions, so that you can adjust your business strategies accordingly. However, the data from the Xero Small Business Index suggests that there is still room for growth and optimism in 2023.
FAQs
What is the Xero Small Business Index?
The Xero Small Business Index is a monthly economic indicator that tracks the performance of small businesses in Australia. The index is compiled from anonymised data from over 1 million subscribers to Xero’s online accounting software.
What does the Xero Small Business Index measure?
The Xero Small Business Index measures small business jobs and sales growth, as well as inflationary pressures.
How can small businesses cope with increased expenses?
If your cash flow is suffering due to rising expenses, consider a lightning loan with OnDeck. OnDeck offers fast, flexible loans to small businesses to help them manage their cash flow and keep growing.
What is OnDeck?
OnDeck is a leading provider of online business loans in Australia. OnDeck offers fast, flexible loans to small businesses to help them manage their cash flow and keep growing. Find out your business credit score for free in minutes.
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