Summary methodology
The Intuit QuickBooks Small Business Index creates aggregated data outputs from a sample of anonymized QuickBooks Online Payroll customer payroll records which are calibrated using statistical methods to create modeled results which better reflect the general population of small businesses in each country, as represented by published official statistics. Statistical adjustment ensures the Index truly reflects employment and job vacancy changes rather than trends in the QuickBooks customer base.
Rounded values
Total and monthly changes in employment and job vacancies have been rounded to the nearest hundred. Monthly changes and growth rates are calculated before total employment or job vacancy values are rounded. Rates have been rounded to the nearest hundredth.
Seasonal adjustments
The Index’s data insights are seasonally adjusted to limit the effect of seasonal patterns in employment and hiring throughout the year, which lead to regular fluctuations in workforce growth and contraction.
Time series
The Index uses data going back to January 2015 in the US and Canada and January 2018 in the UK. Published at the earliest opportunity every month, it shows the number of people employed by small businesses (US and Canada) or the number of job vacancies at small businesses (UK) in the previous month and how that number has changed since the month before. In March, for example, the Index shows total employment or job vacancies in February and the monthly growth rate—up or down—compared to January.
The Index’s primary benefit is its unparalleled focus on small businesses, which are vital to the current and future health of the economy but often underrepresented in economic data. By shining a brighter light on small businesses, Intuit hopes to increase their growth and success rates throughout the US, Canada, and the UK. At the same time, it helps to eliminate almost all of the time lags in official statistics—for example, of up to nine months in the US—by providing estimated projections of what those statistics will ultimately show when they are published.
Sample sizes
The total sample across all three countries is around 424,000 small businesses. The US sample is almost 333,000 small businesses. The Canadian sample is almost 66,000 small businesses. The UK sample is almost 25,000 small businesses. The minimum sample sizes for regions or sectors to be included in the Index are 1,000 small businesses in the US, 800 small businesses in Canada, and 200 small businesses in the UK.
Target populations
In the US and UK, the Index reflects the population of small businesses with one to nine employees, while in Canada it reflects small businesses with one to 19 employees. The differences in target populations ensure the data insights are consistent with official statistics available for benchmarking during the calibration process. Data insights for these target populations are particularly valuable since most datasets fail to cover this portion of the economy well. Please note: Unlike the US and Canada Indexes, the UK Index uses job vacancy data for calibration rather than employment data because official employment statistics are not currently available on a monthly basis for small businesses.
New UK jobs index launched June 2024
When the Intuit QuickBooks Small Business Index was launched in March 2023, due to limitations in the UK’s official statistics, it tracked monthly job vacancies in the UK but employment (jobs) in the US and Canada. In June 2024, the Small Business Index was expanded to track monthly employment in the UK as well, bringing it into line with what’s already published in the US and Canada. The update was made possible by an upgrade to the UK methodology (Akcigit et al, 2023) which overcame the limitations in the UK’s official statistics by applying a reweighting methodology to the UK jobs data instead of the usual benchmarking approach that’s applied to other Index data. Official statistics are an important component of the Index because they make it representative of the small business economy as a whole (not Intuit’s business or customers).
Technical details on the new UK employment index can be found here in the June 2024 Methodology Addendum.
External data sources
External data sources used alongside anonymized QuickBooks data include:
Employment growth formula
Employment growth(t) = [Employment(t)-Employment(t-1)]/[0.5*Employment(t)+0.5*Employment(t-1)]
Employment levels
The Index produces a monthly prediction of employment growth rates by country, region, and sector. In order to translate these growth rates into the number of jobs/vacancies gained or lost, the growth rates are multiplied by the prior month’s predicted employment levels, except during the months when official statistics are published. During those months, the latest official employment levels that have been reported are used in the calculation instead of the Index’s prior month’s predicted employment levels. As a result, the Index’s predicted total employment levels may at times differ from the predicted growth rates. Official statistics are published at different frequencies depending on the country ranging from monthly to quarterly.
2024 update to employment levels calculations for regions and sectors
In April 2024, the Index methodology was updated to clarify the monthly jobs number estimates (also known as "employment levels") for regions and sectors in the US, Canada, and the UK. As a result of the update, from April 2024 onwards, the sums of jobs number estimates for regions/sectors are equivalent to the national total before rounding. After rounding for clarity, small discrepancies may remain but this is intentional. Previously, there were larger discrepancies in the sums which have been resolved by reweighting the growth rate estimates for regions and sectors to align with the national total. Please note that this update has not been applied retrospectively to any data published before April 2024.
Technical details on the reweighting update can be found here in the April 2024 Methodology Addendum.
Definitions
Firms versus establishments: The administrative data for each anonymized QuickBooks Online Payroll account corresponds to the firm and may also correspond to business establishments (physical locations where business is conducted). However, because the Index is primarily focused on small businesses with 1-9 (in the US and UK) or 1-19 (in Canada) employees, the difference between establishments and firms is minimized.
Firm size: The size of a firm is determined by the average of the number of employees across two consecutive months.
Employee count: Anonymized administrative data from a sample of QuickBooks Online Payroll customer accounts provides counts on the number of employees, furloughed employees, and paychecks issued in a given pay period. Employees include wage earners with no hours in the pay period, workers on unpaid leave, and furloughed workers. The Index focuses on active and working employees but excludes furloughed workers as well as bonus payments and adjustments.