Retail as well as construction and hospitality remain in the doldrums, new data shows. Photo: Rawpixel Ltd
Small business sales posted their first quarterly rise in two and a half years, but small business jobs are still falling.
The latest Xero Small Business Insights (XSBI) indicates sales rose by 1.9 percent in the three months ended September over the year earlier, although when adjusted for inflation, it is still a decline in real terms.
But small business jobs fell by 1.2 percent for the three months ended September over the year earlier.
Country manager Bridget Snelling said while these results were well behind the long-term national sales growth average of 6.2 percent year-on-year, there was reason for hope beyond what has been a difficult trading environment.
"The last four months have shown positive sales growth, the longest consecutive run since mid-2023. Following the Reserve Bank of New Zealand's interest rate cuts, the XSBI data suggests extra spending is gradually flowing through to small businesses."
Regional differences are still apparent as Auckland and Wellington recorded modest sales increases at of 0.6 percent and 0.4 percent, but Canterbury rose by 4.3 percent and Otago rose by 6.3 percent versus a year ago.
Snelling said that the divergence of jobs and sales results was likely due to the lagged nature of employment.
"Businesses will want to see more sustained levels of sales growth before building back confidence to increase their workforce."
Agriculture cools but professional services surge
Agriculture sales cooled in the September quarter, growing only 3.3 percent versus a year ago, down from 11.1 percent in the June quarter.
Snelling said the star performers for 2025 have been manufacturing which saw sales rise by 2.9 percent and jobs grow by 0.6 percent year-on-year.
She said professional services sales rose by 2.4 percent and jobs grew by 1.8 percent year-on-year.
Both sectors have recorded at least three consecutive quarters of positive sales and jobs growth, something that has eluded other industries.
Construction, hospitality and retail remain in the doldrums, sales falling by 0.7 percent, 1.0 percent and 2.9 percent respectively.
Snelling said the jobs market remains particularly tough for young people as construction, hospitality and retail were big youth employers.
She said the economy was showing some hopeful signs, but wasn't out of the woods yet, urging consumers to get out and support small businesses.
"One way we can all bring some community spirit is by making an effort to shop local and support small businesses this festive season."
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