*This article first appeared on RNZ and is republished with permission.
Small businesses reported a spike in sales in March, leading to higher wages and more jobs.
Accounting software firm Xero’s new small business index rose sharply in March, up 17 points to 122.
A reading above 100 suggests small firms are performing better than average.
The rise has been driven by strong annual growth in sales, wages and jobs. However, the numbers were inflated as activity dropped a year ago when the country went into the first lockdown.
But Xero’s managing director for New Zealand, Craig Hudson, said there were signs the underlying picture is improving.
“One of the the key numbers which we see coming through is the speed in which small businesses are getting paid and it’s getting faster and faster, which is fantastic.
“We are now sitting at 21.2 days to get paid, which is down a huge amount on pre-Covid [levels].”
He said the increased speed improves the cash flow for small businesses, which they can then reinvest in the economy.
Across different sectors, sales in retail and manufacturing businesses were both up nearly a quarter on last year, while real estate and hospitality spending increased by about 17 percent.
“We also saw job numbers grow across all industries year-on-year for March with the exception of hospitality (-7.8 percent), which remains impacted by the pandemic’s effect on the tourism industry at large,” Hudson said.