Small business employment rebounds past pre-Covid levels

Monday, 30 November 2020

The number of people employed by small businesses climbed 1.4 per cent in October compared with pre-Covid-19 levels, according to data from Xero.

But small business revenue remained flat, compared with the same time last year, the data showed.

Xero managing director for New Zealand and the Pacific Islands Craig Hudson said the data showed the economy was performing consistently, with week-on-week growth in jobs since mid-September.

Hudson said the growth was a positive sign for small businesses.

Skinnies co-founders Martha Van Arts and Olly Van Arts started the sunscreen company 10 years ago, but started to diversify their product range because of Covid-19.

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Kiwi sunscreen-maker Skinnies co-founder Martha Van Arts said the business was growing again after having the rug pulled out from under it when the virus spread.

”After the first week of shock, we dug in, like most small Kiwi businesses do, and thought about how we could mitigate any negative effect on the business,” she said.

The company quickly focused on online sales for its Northern Hemisphere markets, as well as expanding the range to include products that had year-round appeal.

Skinnies chief executive Olly Van Arts said dealing with international businesses made him realise just how well New Zealand was doing.

The company had a massive summer planned for the local market, he said.

“The New Zealand market is roaring ahead in terms of people getting out and enjoying themselves,” he said.

In the post-Covid-19 period, Skinnies had doubled its retail footprint with its key partners, Farmers and Green Cross Health, he said.

Xero managing director for New Zealand and Pacific Islands, Craig Hudson, said new data showed the country’s economy was growing consistently, which was a positive sign.

Hudson said it was a positive sign that revenue for most small businesses had been consistent, even if there wasn’t significant growth.

New Zealand was in a fortunate position to have one of the more open economies amid the global pandemic, he said.

“We also have a very strong connection with small businesses, there has been a lot of talk around shopping local, and we seem to be holding on to that.”

New Zealand had not faced mass redundancies and there was still a considerable amount of discretionary spending, he said.

“People in steady jobs have still got them, and they are getting out and living their lives and spending money, some like they have no tomorrow. They don’t seem to be too concerned with what is around the corner.”

While the numbers were generally positive, some industries continued to struggle, he said.

Jobs in hospitality were down 9.7 per cent compared with figures indexed at the week ending February 2.

Hospitality businesses weren’t necessarily closing their doors, Hudson said.

Instead, staff and managers were working harder than ever ahead of the busy summer season.

Hospitality business owners were reluctant to hire new staff because they were uncertain as to what the future looked like, he said.

“There is a sense of trepidation over what the future might look like [for hospitality businesses], even though things might be trucking along OK.”

Hudson said the country could not go into another lockdown if it wanted to maintain growth.

“There is no cash reserves in small businesses to tide them over,” he said.

“How would they get through another four-week lockdown with no cash? So that is quite a thing to be hanging over small businesses.”

Hudson said a little more certainty from the Government over ongoing support would help.

New Zealanders also needed to keep helping small businesses by shopping local.