Despite the fall, the index is still around historically high levels, and above 100 for the fourth consecutive month.
The data also shows small business jobs increased in April, despite JobKeeper finishing at the end of March 2021.
The Small Business Index, part of the Xero Small Business Insights, aims to provide insights to help inform decision-makers on the state of the small business economy as a group (as they are all unique).
It sheds light on the small business economy by providing regular update readings on the overall state of small businesses in Australia, New Zealand and the United Kingdom.
It is comprises four key measures of small business: sales, time to paid, jobs and wages.
The single index approach makes it easier to see improvements or declines on a month-to-month basis by combining the four main indicators, which are all measured differently, into a single number that is measurable, consistent and simple to understand.
The Xero Small Business Insights (in partnership with Accenture) is based on anonymised and aggregated data of hundreds of thousands of customer records.
Key findings of the index include:
- Small business jobs rose 23.1 per cent year-on-year. This figure is inflated by the 10.2 per cent decline for the year-on-year result in April 2020. Averaging out the results across 2020 and 2021, jobs rose 5.1 per cent year-on-year, which was similar to the 5.0 per cent year-on-year result recorded in March.
- Small business sales rose 18.5 per cent year-on-year, but this result is distorted by the low April 2020 reading. Adjusting for this by averaging out results for 2020 and 2021, sales rose 4.4 per cent year-on-year.
- The time small businesses had to wait to be paid lengthened in April by 0.6 days to 23.4 days. This reverses the fall seen in March, with time to be paid now back to the level seen in October 2020. Small businesses were paid on average 6.9 days late. This is 0.5 days longer than in March 2021.
- Small business wages, as measured by average employee hourly earnings, rose 3.7 per cent year-on-year. Again, adjusting for the effect of the low result in April 2020 (an increase of 1.3 per cent year-on-year), the wage increase in April 2021 was 2.5 per cent year-on-year.