Xero’s September quarter report shows strong job growth across key sectors, stable wage increases, and a continued lead in global sales growth despite a gradual slowdown. However, slight increases in payment times highlight cash flow pressures as businesses approach the year-end.
- Sales Growth: Averaged 3.7% year-over-year (y/y) for September quarter (down from 5.0% y/y in June).
- Wages Growth: Averaged 2.9% y/y in September (slightly up from 2.8% y/y in June).
- Jobs Growth: Averaged 4.8% y/y (up from 4.3% y/y in June).
- Payment Times: Small businesses waited 22.1 days to be paid, a slight increase from 21.7 days in June.
Strong hiring trends continue
Job growth among small businesses remained robust through September, particularly in August (+5.0% y/y) and September (+5.8% y/y) — marking the largest jump in two years. Public administration (+9.0% y/y) and healthcare (+8.6% y/y) led in job gains, driven by public sector spending. Meanwhile, hospitality continued a five-quarter decline, losing jobs (-0.2% y/y). Regionally, Western Australia showed the strongest job growth (+6.7% y/y), while Tasmania saw the weakest (+2.3% y/y).
Australian sales growth leads globally
While sales growth slowed to 3.7% y/y, it still outpaced global peers, with the US (-0.9% y/y), New Zealand (-2.7% y/y), and Canada (-3.7% y/y) showing declines. Public administration (+12.0% y/y), healthcare (+10.2% y/y), and Queensland (+5.8% y/y) led growth, while hospitality (+0.3% y/y) and Tasmania (-0.6% y/y) lagged. July sales rebounded from June’s decline, likely reflecting tax cut impacts that increased disposable income.
Wage growth steady
Wages growth remained stable at 2.9% y/y, with small businesses continuing to trail the national wage growth average (4.1% y/y to June).
Slight rise in payment times
Small businesses saw payment times increase to an average 22.1-day wait, up from 21.7 days in June. Late payments averaged 6.1 days, a minor uptick from June.
Theo Konstantas, Xero Sales Director for Australia, noted that while small businesses continue to adapt, managing cash flow is crucial as payment delays rise. Offering more payment options, including digital solutions, could support cash flow heading into the holiday season.
Read the latest Xero Small Business Insights Australia Update for further details.
