WA is leading the country when it comes to small and medium-sized business labour productivity amid a nationwide decline, according to a fresh report from accounting software provider Xero.
Xero’s latest report on Thursday uncovered notable disparities in small business labour productivity — measured by sales per hour worked, or sales per employee — across key industries and regions.
According to data from more than 240,000 customers Xero small business customers, WA has emerged as the most productive State at $102.50 per hour. WA’s average productivity was 15 per cent higher than Tasmania ($89/hour), the least productive State.
The most productive Australian industry in 2023 was wholesale trade ($214.20/hour). While hospitality lagged at $40.20/hour, Xero data suggests the sector was embracing technology to lift productivity in response to ongoing staff shortages.
While a decline in productivity was experienced across all industries, 10 sectors, including manufacturing, agriculture and construction, surpassed the national productivity average ($100.30).
“Labour productivity is an important indicator of small business success, and itʼs clear some industries and states are thriving while others lag,” Xero ANZ managing director Anthony Drury said.
“We encourage small businesses to look at ways to digitalise to drive greater efficiencies in their day-to-day operations.
“This is particularly crucial for service-based businesses like hospitality and healthcare, which are currently tracking below the national productivity average.”
The fresh data followed Xero’s small business insight report in April which highlighted a nationwide decline in small business productivity growth throughout 2023.