New data from Xero’s Small Business Index (XSBI), which provides a health check into the Australian small business economy, has revealed Australian small businesses continue to show resilience amid the challenging economic environment of high interest rates and persistent inflation.
Compared to other XSBI countries (NZ, UK, USA, Canada), Australia is the best-performing country in terms of sales growth, despite a slight drop in performance in the September quarter.
Key insights from the Index (covering July — September) include:
- The Xero Small Business Index fell 2 points in September to 121 points. For the three months to September, the Index averaged 122 points, which is marginally lower than the average for the first half of 2023 (127 points).
- Sales growth continued its slowing trend, with sales rising just 5.5% year-on-year (y/y) in September — the smallest three-month sales rise since the first three months of 2021.
- Health care (+13.2% y/y) and education and training (+10.5% y/y) have seen the highest sales growth, while the weakest industries were agriculture (-6.2% y/y), wholesale trade (-1.1% y/y).
- Wages growth continued to slow, rising just 1.9% y/y in September — the smallest monthly rise since December 2020.
- Jobs growth remained steady, increasing by 3.0% y/y in September and 2.7% y/y in the three months to September.
Payment times were also broadly similar to the first half of the year result of 22.8 days, with small businesses waiting to be paid 22.7 days in September.
