New Zealand’s small business productivity has slipped and remains below its long-term average, according to newly released Xero data.
Xero data shows New Zealand’s small business labour productivity has edged down, averaging $74 per hour worked in the March quarter, slipping from $75.30 in the December period. This was broadly in line with the previous six months, but still below the long-term average of $76.30 per hour.
“It’s disappointing we’re not seeing the kind of improvement needed to lift the small business economy,” Xero country manager Bridget Snelling said.
Productivity per employee also eased in the March period, averaging $9,168.90 per worker, down from $9,389.30 in the previous quarter. However, it remained broadly stable in context, sitting close to the long-term average of $9,137.00/
“For small business owners, improving productivity isn’t just an economic concept – it’s a practical way to grow profits and lift wages, regardless of wider conditions,” Snelling explained.
“There are clear opportunities here. Businesses that invest in the right processes, skills and digital tools are better placed to free up time, focus on customers, and drive growth.”
New Zealand also continued to lag behind Australia and the UK on the measure, which Xero said highlighted the scale of the productivity challenge facing the country. Performance between Australia and the UK has fluctuated in recent years, but New Zealand has remained consistently behind both.
Snelling said that falling behind international peers such as Australia and the UK is a clear reminder that lifting productivity must remain a long-term national priority, rather than a short-term policy focus.
“The encouraging part is that there are clear levers – from digital adoption to skills and process improvements – that can help close that gap over time. Our small businesses can’t afford to sit still; this needs to be a priority.”