Xero Small Business Insights (XSBI) shows a 1.9% increase in small business sales for the three months ending in September compared to the same period last year; however, after adjusting for inflation, this represents a real-term decrease.
Meanwhile, small business employment declined by 1.2% in the three months ending in September compared to the previous year.
“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,” Country manager Bridget Snelling said.
In terms of regions, Auckland and Wellington experienced slight sales growth of 0.6% and 0.4%, while Canterbury saw a 4.3% increase and Otago a 6.3% rise compared to the previous year.
Snelling suggested that the difference between job and sales outcomes was probably caused by the delayed response of employment.
“Businesses will want to see more sustained levels of sales growth before building back confidence to increase their workforce.”
Manufacturing has been the standout sector in 2025, with sales increasing by 2.9% and employment rising by 0.6% compared to the previous year.
Agriculture sales slowed in the September quarter, increasing by just 3.3% year-on-year, compared to 11.1% growth in the June quarter.
Sales in professional services increased by 2.4%, while employment grew by 1.8% compared to the previous year.
Construction, hospitality, and retail sectors continue to struggle, with sales declining by 0.7%, 1.0%, and 2.9%, respectively.
According to Snelling, the economy was showing encouraging signs, but challenges remained, encouraging consumers to go 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.”