"The feedback I'm getting directly from small businesses is that they're struggling right now. Even those who are generating good numbers seem to be working a lot harder to get the job done. It's also important we don't underestimate the mental toll the ongoing lockdown restrictions and uncertainty are having on the small business community.
"But overall, the data shows how the small business sector was better prepared for this wave of lockdowns, taking on the lessons learnt last year. All were disrupted in September, but with digital tools and perseverance many have managed to turn things around quickly in October to head back in the right direction," Hudson said.
Improved sales figures across the country
After easing to alert level 3, Auckland led the strong October turnaround with sales growth of 6.7 per cent year on year, following a sharp fall of 20.7 per cent year on year in September.
Across the country, all other regions experienced improvements in sales growth apart from Waikato which, after moving from alert level 2 to 3 early in the month, saw sales growth slow from 5.6 per cent year on year in September to 2.2 per cent year on year in October.
Most industries saw a strong bounceback in sales, led by construction with an increase in 10.4 per cent year on year after dropping down to 14.0 per cent year on year in September, manufacturing increased to 6.3 per cent year on year after a 4.3 per cent drop year on year and retail trade increased by 4.6 per cent year on year after a drop from 2.9 per cent year on year.
And while improving on September's results, the hospitality sector was still down 7.6 per cent year on year in October as the sector grapples with trading restrictions under lockdown.
"It appears that small businesses have their cash flow back under control in October after a couple of uncertain months, especially in Auckland," Hudson said.
"This has a flow-on effect to payment times, with Kiwi businesses waiting less time to get paid in October than September where it rose to at its highest level since June 2020."
Small business owners waited an average of 23.8 days to be paid in October. The late payments measure, which tracks the average number of days late that invoices are paid, also declined by 2.6 days to 5.8 days.
In Auckland specifically, the time to be paid improved by 3.7 days in October and now sits at 26.1 days but remains higher than all other regions.
"This shift suggests an overall improvement in small businesses being paid on time, rather than any shift to shorter payment terms," Hudson said.
Nationwide small business job growth
In October jobs rose 4.4 per cent year on year in October, up from 3.6 per cent year on year in September.
This performance, amid ongoing trading restrictions for most service-based Auckland businesses, is a strong outcome.
Due to the extended alert level 3 lockdown, Auckland was the softest region for the second month in a row, with jobs rising 3.4 per cent year on year, the survey revealed.
In contrast, other regions continued to record above-average rises: Wellington rose by 6.9 per cent year on year, Canterbury up by 6.9 per cent year on year, Otago up by 6.4 per cent year on year and Waikato to 5.1 per cent year on year.
Across industries, there was strong growth recorded for professional services which went up to 9.6 per cent year on year, manufacturing up to 9.4 per cent year on year and construction up to 7.8 per cent year on year.
"Unfortunately, hospitality continues to bear the brunt of ongoing lockdowns, with jobs falling 8.0 per cent year on year in October - the only industry in negative territory," Hudson said.
"One potential side effect of the ongoing lockdown restrictions is Kiwis being turned off working in hospitality due to uncertainty around their employment and are instead opting for more 'steady' employment in retail and other sectors.
"Despite this, the growth across other industries shows resilience in Kiwi small businesses. With restrictions lower outside of Auckland, it's a positive sign to see above-average year on year growth across the country."
Small Business Index climbs again
The New Zealand Small Business Index rose 22 points in October to 110 points, after Auckland moved from alert level 4 to alert level 3 in late September.
Apart from Waikato, the majority of New Zealand remained at alert level 2 throughout October, where businesses are able to operate with minimal restrictions.
Despite the ongoing restrictions, it appears New Zealand small businesses have continued to remain productive.
Looking overseas, both Australia and the UK have seen below-average Indexes readings despite having fewer restrictions. Australia's index scored 94 points in October and the UK was at 95 points.
"It's encouraging to see the Small Business Index climbing after falling over the last few months due to the snap alert level Four lockdown and ongoing restrictions in Tāmaki Makaurau and other parts of Aotearoa," Hudson said.
