Xero, a global small business platform, has released its quarterly Xero Small Business Insights (XSBI) data for Canada, providing a comprehensive snapshot of the health of the small business sector.
The latest data, which covers the period from July to September 2024, reveals that while the time it takes to get paid is improving, late payments and sales of goods and services continued to decline.
Key Findings:
- Small business sales in Canada fell by 2.5% year-over-year (y/y) from July to September 2024, despite interest rate cuts implemented by the Bank of Canada to encourage consumer spending.
- The time-to-be-paid improved slightly, with small businesses being paid 0.7 days sooner compared to the previous quarter.
- However, late payments worsened, increasing from 7.6 days in the three months to June to 8.2 days in the three months to September.
- Regional data across British Columbia, Alberta, and Ontario showed that all three provinces experienced a year-over-year decline in sales, with British Columbia recording the weakest sales performance (-5.0% y/y) and Alberta having the smallest fall (-2.6% y/y). Expert Insights:
According to Louise Southall, Economist at Xero:
“Our latest XSBI data highlights a challenging but important reality: interest rate cuts take time to flow through to the small business sector.”
Southall also noted that the US government’s decision to levy tariffs on Canadian goods and the subsequent retaliatory measures would impact small businesses and their customers on both sides of the US-Canadian border.
Mike Cascone, Vice President of Government Experience, Americas at Xero, emphasized the importance of small businesses focusing on unchanging factors of business success, such as managing cash flow, building strong customer relationships, and maintaining operational efficiency.
As covered, Xero is a global small business platform with 4.2 million subscribers, providing smart tools to help small businesses and their advisors manage core accounting functions, payroll, and payments.
The Xero Small Business Insights (XSBI) data is aggregated and anonymized to ensure the privacy of Xero subscribers and their counterparts.
The aim of XSBI is to create insights that inform decision-makers in support of the small business economy.