New data from Xero’s Small Business Index (XSBI) has revealed Australian small businesses have been resilient to recent economic challenges of the first half of the year, with overall business conditions remaining better than the long-term average.
Xero’s Small Business Index which provides a health check into the Australian small business economy shows that while sales, jobs and wages growth has slowed in the first half of 2023, overall conditions remain better than the long-term average Australian small businesses are also faring better than their peers in the UK, NZ, US and Canada.
Key insights include:
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The Xero Small Business Index averaged 120 points in the first five months of the year – above the 112 point average of the last three months of 2022.
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Sales growth slowed in the second quarter of the year to 8.0% y/y, but remained above the long term average
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Wage pressures have eased, suggesting small businesses have reached the point where they are unable to keep up with wage offers being made by large businesses
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Jobs growth was the weakest metric, falling below average with real estate the weakest industry
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Hospitality and retail small businesses have been the most impacted by the slowdown in consumer spending, with hospitality experiencing the biggest decline in quarterly sales (-17.2% Q1 to Q2) while retail had its lowest sales growth since September 2022
