27 Oct 2022

Wage growth slows but sales growth strong, report shows

8:53 am on 27 October 2022
Euro Pay slip and calculator, close up for payroll or salary background, french mention Net to pay

Wage growth slowed to 5.1 percent in September. Photo: 123RF

Xero's small business report shows strength in wage claims is easing as firms navigate and adjust to the changing economic climate.

Wage growth slowed to 5.1 percent in September off a mid-year peak of 6.7 percent.

"A slowing in wage growth will likely be a welcome sign of relief for small business owners grappling with rising wage demands from employees," Xero country manager Bridget Snelling said.

Sales growth was strong in September, up 14.8 percent from the same time last year, well ahead of the latest inflation figure.

"When we factor in the latest inflation figure of 7.2 percent for the September quarter, this shows sales volumes are still rising," Snelling said.

"This, coupled with increased activity, is a good indication Kiwis are making an effort to spend locally and support the small business community in a fairly uncertain economic time.

"Ultimately, itʼs encouraging to see that, for now, small businesses are still confident enough in their sales to be hiring new staff while balancing wage demands and rising inflation."

Snelling said the strong jobs growth of 8.5 percent was a particularly encouraging result as small businesses continue to hire against the backdrop of record low unemployment.

"The small business economy is still highly attractive to Kiwi employees and competing well with large businesses."

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