-- Small businesses in Australia had a firm start to the year, with the March quarter recording a 7.2% jump in sales, though higher fuel prices amid the Middle East conflict present a key risk, Xero said Thursday.
According to Xero Small Business Insights data, the quarter showed strong results, especially in the last two months despite the central bank raising the cash rate twice, which could have hurt the sales. Sales, jobs and wages all grew during the quarter, nearly reaching their historical average growth rates.
The firm said price increases driven by surging fuel costs are so far not widespread among small businesses, and sales growth in March was possibly due to an uptick in physical sales rather than pricing.
This is reflected in a 13.2% climb in transport and logistics industry sales, a sector most exposed to fuel prices.
"The longer fuel prices remain high the greater the risk that the Reserve Bank of Australia will respond with more increases in the cash rate to combat the widening inflation shock," the firm said.
Xero added that current fuel stocks in the fuel import-dependent country are "sufficient" and advised small businesses to buy fuel as normal.