Sales for small businesses in the agriculture sector fell 6% in October compared with October 2021, performing significantly worse than the national average of 5.8% growth.
The agricultural sector figure was included in the Xero New Zealand Small Business Index for the month of October, reporting on sales, jobs, wages and payment times.
Xero makes the reports from data in its computerised, anonymised client transactions.
Xero’s New Zealand country manager, Bridget Snelling, said the declining sales are hitting the agricultural sector hard.
“Not only is the agri sector selling less, but the cost of doing business is going up.
“Agricultural small businesses are currently dealing with a 6% drop in sales and an inflation rate of 7.2%.
“Agri small businesses are also facing historically high wage growth. In October, agri wages were up 5.2%, significantly up from the 2021 average [growth] of 3.5% for the sector.”
Jobs across the sector also fell 0.3% over the year to October, tracking well below the national average of 7.4% growth.
After being asked for more details, Xero said it had reported on one month of falling sales and it was therefore too early to say it is a trend, but it is nonetheless worth keeping an eye on.
Because of the falling employment, it could be that small businesses in the agri sector are finding it much harder to expand production and increase their sales.
Xero said the sales drop is based on aggregated anonymous data from small businesses in the agri sector, including farms, and doesn’t include any of the large dairy export-focused businesses.
