Wednesday, December 6, 2023

Agricultural suppliers feeling sales pain

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One bright spot is that sector is better at paying its bills on time.
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Sales for small businesses in the agriculture sector fell 11.5% in September, compared with September 2022, performing significantly worse than the national average, which was minus 1.5% on the year before.

The latest Xero Small Business Index (XSBI), released quarterly, shows that the agricultural sector has lagged the national average across sales, jobs and wages but that time taken to payment is favourable.

Xero makes the reports from data in its extensive computerised, anonymised client transactions.

It surveys in five countries and in New Zealand it breaks down the results from 10 regions in eight sectors.

The survey sampled 600,000 of Xero’s small business customers.

The data is collated monthly but reported only quarterly. 

In the September quarter, sales growth in agriculture was minus 5.4%, the weakest of all NZ industries in this period. Sales growth covers both goods and services, but in agriculture that is strongly weighted to goods, Xero economist Louise Southall said.

Jobs in agriculture grew 2.1% in September, below the national average of 6.9%.

Jobs in agriculture averaged 3.4% growth in the three months to September, the smallest rise of the industries tracked by XSBI.

Wages in agriculture grew by 2.3% in September, compared with the previous September, and also by 2.3% across the July-September quarter, and this was the smallest rise of all industries.

In September, small businesses in agriculture were paid an average of 4.1 days later than the due date for the invoice.  The national average in September was six days late, and agriculture consistently had the shortest late payment time of all industries.

“The XSBI is not a customer survey but an anonymous tracking of transactions through the Xero Platform, and that is one of its great strengths,” Southall said.

“Because of agriculture’s exposure internationally, sales growth during the past year has been slow.

“On the positive side are the shorter payment time and jobs growth as international borders open and backpackers return.”

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