NEW ZEALAND BUSINESS NEWS
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Hiring among New Zealand’s small businesses picked up in the September quarter after a soft patch earlier in the year, according to Xero’s Small Business Insights data. The survey, which tracks the accounting software company’s small business customers, found employment rose 2.5% compared with the same quarter a year earlier. That is more than twice the 1.0% recorded in the June quarter and edges past the long-run average of 2.3%.
Sales told a different story. Revenue growth eased to 5.6% year on year, down from 9.1% in the June quarter, though it remained close to the historical norm of 6.2%. Taken together, the two measures suggest owners are converting earlier trading gains into staff rather than seeing a fresh surge in demand.
Real estate services led the field, with employment up 7.0% on a year earlier. Administrative services followed at 6.4%, professional services at 3.9%, and construction at 2.8% — all ahead of the national figure.
Hospitality was the outlier. It was the only sector highlighted in the data to shed jobs, with employment down 1.4% year on year. That fits a pattern of households keeping a tighter grip on discretionary spending, leaving cafes, bars, and restaurants with less room to add staff.
Construction also topped the sales table, with revenue up 7.0%. Administrative services grew 6.8% and healthcare 6.0%. Agriculture, which had a standout June quarter, slowed sharply to 4.7% from 14.3%. Hospitality again brought up the rear on sales, at 3.4%.
Against the four other countries Xero tracks, New Zealand posted the strongest small business sales growth in September. Its 5.6% compared with Australia at 4.3%, the United Kingdom at 3.9%, the United States at 2.5%, and Canada at 0.5%.
Wage growth, however, stayed weak at 1.3% year on year, well short of the 3.5% historical average. Payment behaviour also deteriorated. The average time to be paid lengthened by 0.3 days to 25.4 days, and average late payment times rose by 0.9 days to 5.2 days.
New Zealand still had the shortest late payment times of the five countries in the tracker. Even so, the drift upwards points to tighter cash flow for some operators while costs remain elevated.
Canterbury recorded the fastest employment growth at 5.4% year on year, with Waikato next at 3.2%. Two regions went backwards. Northland’s small business jobs fell 0.5%, and Marlborough, Nelson, and Tasman together posted a 0.3% decline.
The regional split echoes the sector results: the gains are concentrated in parts of the services economy and in construction, while businesses that rely on consumer spending are still under pressure. Any recovery across the small business sector is not being felt evenly.
Taking on staff is a long-term commitment for an owner-operator, and the lift in hiring suggests some have enough confidence in their order books to make it. The catch is that the confidence rests on sales holding up and on invoices being settled on time.
Longer payment times make planning and investment harder, particularly with operating costs still high. For businesses weighing a new hire, the September figures offer encouragement on demand but a warning on cash flow. Wage growth of 1.3% may ease the cost of a hire, yet it also signals limited pricing power in the market.
The next quarter’s data will show whether the hiring rebound holds or fades with the slower sales growth.
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