Xero has released its Small Business Insights which reveals sales among Kiwi small businesses rose 8.6% year-on-year in the June quarter. This is the strongest result in almost four years, and the first quarter since December 2022 where sales growth has outpaced the historical average of 6.2% year on year (y/y).
The result builds on a 5.1% y/y rise in the March quarter, but the headline number masks a sales recovery that has been far less even across industries.
Agriculture sales rose 16.3% y/y, consistent with recent government reporting on strong agricultural exports, and was the single biggest driver of the national sales result. Construction (+11% y/y) and manufacturing (+8.6% y/y) also performed strongly, though both results were flattered by weak comparisons in the June quarter of 2025.
Bridget Snelling, Country Manager — Aotearoa New Zealand at Xero, says the numbers point to a two-speed economy.
“On the surface this looks like an outstanding quarter for small business sales, and in agriculture it genuinely was. But once you look industry by industry, it’s clear the recovery isn’t being felt evenly. Agriculture is doing the heavy lifting, while sectors exposed to discretionary spending like retail and hospitality are still finding conditions tough,” Snelling says.
The regional data tells a similar story. Canterbury (+12.3% y/y), Manawatu-Whanganui (+11.9% y/y), Waikato (+10.0% y/y) and Southland (+9.6% y/y), all regions with a strong agricultural base, recorded exceptional sales growth.
Auckland (+7.2% y/y) and Wellington (+7.1% y/y) grew more modestly, while Marlborough, Nelson and Tasman, a new combined region added this quarter, rose just 4.4% y/y.
Despite the strength in sales, small business jobs rose just 0.7% y/y, dragged down by a 0.3% decline in the month of June alone. Wage growth was similarly subdued, rising just 1.5% y/y, which is the smallest quarterly rise in the history of the Insights series (back to March quarter 2017), and well below the historical average (+3.6% y/y).
“When sales growth is this concentrated in one part of the economy, it’s not surprising that jobs and wages haven’t followed. Add in the uncertainty small business owners are facing around fuel costs and global events, it makes sense that many are holding off on hiring for now,” Snelling says.
