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Australian micro businesses outperform global markets in COVID-19
Fri 5 June 2020 - 6:48 amSmall Business
Australian micro businesses fared better than all comparative global markets, including the US, UK, Europe and Canada, in the wake of the COVID pandemic, despite the 12% decline of total invoiced dollar amounts in April 2020 compared to April 2019, according to data released by Invoice2go.
Micro businesses have been some of the worst affected by the pandemic, with strict social distancing restrictions isolating them from their customers and, in many cases, forcing the temporary closure of thousands of businesses across Australia.
According to an analysis of the invoiced dollar amounts from over 24,000 Australian micro businesses in April 2019 and April 2020, Australian businesses have suffered a 12% decline, faring significantly better than those in the US (-27%), Canada (-40%), Europe (-46%) and the UK (-53%).
Those considered an ‘essential service’ performed better, such as home maintenance and outdoor services which experienced just a six percent contraction compared to 2019, followed by construction and trades (9%). On the other hand, the marketing and creative industries have been hardest hit, experiencing a sizable 42% decline, followed by entertainment, events and food services (-37%) and health and wellness (-25%).
Mark Bartels, CFO at Invoice2go comments, “Australia has done a fantastic job of flattening the coronavirus curve, and that success is echoed in the comparative strength of its local micro businesses compared to every other comparative market globally. While almost all of Australia’s smallest business owners – from copywriters and graphic designers, to event organisers and tradies – are feeling the pinch, federal and state governments are beginning to ease certain restrictions in an effort to help reinvigorate the economy, so these businesses can begin to think about a return to a ‘new normal’.”
The data also reveals the devastating impact that the widespread bushfires had on Australia’s micro businesses, showing a nine percent YoY revenue decrease in January 2020 compared to 2019, and a 10% decrease in February.
“A critical look at this data is going to be an important indicator for the months ahead,” continues Bartels. “While those businesses considered ‘essential services’ are performing better than others, we need to do what we can to support our smallest businesses during this trying time – even when the situation appears to be gradually improving. If there’s one term that can be used to describe Australian small businesses it’s ‘resolute’, with the way they have responded, recovered and held firm over a six-month period that has presented a stream of unprecedented challenges.”
Micro businesses, defined by those with up to four employees, make up 27% of all businesses in Australia.
This data was compiled by aggregating annual invoicing activity of 24,920 Australia-based Invoice2go users. The year-over-year changes were calculated from this constant sample set of users who subscribed prior to January 1, 2018, and remained subscribed through April 30, 2020.
Invoice2go is an invoicing app, giving small businesses control over their time and business.
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