Intuit QuickBooks Small Business Index, August 2023

-4,800 job vacancies | -3.31%

In the UK in July, small businesses with one to nine employees had 4,800 fewer job vacancies nationally. That’s a monthly decrease of 3.31% to 142,200 vacancies compared to the previous official benchmark of 147,000 in June’s Vacancy Survey, published by the Office for National Statistics.*

Finance and insurance is the only sector that saw job creation this month

Twelve out of the 13 sectors covered by the Intuit QuickBooks Small Business Index posted fewer job vacancies in July compared to June. 

Finance and insurance (UK SIC K) was the only sector to grow, creating 100 new job opportunities in small businesses — a monthly increase of 0.60% to a total of 6,600 vacancies nationwide. This sector includes pension funds and consumer credit businesses as well as insurance companies. 

The three sectors with the largest overall declines in small business job vacancies in July were:

• Education (UK SIC P): down by 500, with a monthly decrease of 3.23% to 14,000 job vacancies. This sector includes business training, sports coaching and language tuition as well as schools and universities.

• Professional services (UK SIC M): also down by 500, with a monthly decrease of 2.96% to 17,800 job vacancies. This sector includes law, accounting, engineering, architecture and scientific research.

• Wholesale and retail (SIC G): also down by 500, with a monthly decrease of 2.62% to 19,100 job vacancies. This sector includes all product-based businesses that either sell to retailers or directly to consumers.

Another sector which contributed to the overall decline in small business job vacancies in July was the real estate sector (UK SIC L). There are currently 5,000 vacancies in this sector, which is 300 fewer than in June — a monthly decrease of 5.01%. This is the fastest rate of decline across all sectors. Businesses in this sector are involved in the buying, selling and leasing of land, homes and buildings.

Small business hiring fell fastest in Northern Ireland

Small business job vacancies were down in all four UK nations in July, with Northern Ireland seeing the fastest rate of decline:

• Northern Ireland: down by 5.65% to 2,100 vacancies — 100 fewer than in June.

• Scotland: down by 4.17% to 8,700 vacancies — 400 fewer than in June.

• England: down by 3.29% to 126,300 vacancies — 4,200 fewer than in June.

• Wales: down by 2.57% to 5,000 vacancies — 200 fewer than in June.

Ufuk Akcigit, the Arnold C. Harberger Professor of Economics at the University of Chicago, said: “In October 2022, UK inflation reached its peak at 11.1%. Since then, it has been on a slow decline and dropped to 7.9% in July 2023. However, this figure remains significantly higher than the Bank of England's target of 2%. To combat inflation, the Bank of England has continuously raised the Bank Rate, reaching a 15-year high of 5% in July 2023.

“Unfortunately, this high inflationary environment, coupled with rising interest rates, can create challenges for small businesses and their access to credit. The tightening credit conditions and fragile demand have likely contributed to the 3.31% contraction in job vacancies for firms with 1-9 employees in July compared to the previous month, as reported by the Intuit QuickBooks Small Business Index. This decline marks the sixth consecutive month of contraction.

“According to the Index, every sector except finance and insurance has experienced a contraction in July. The tightening credit conditions have adversely affected the housing market, leading to a significant decline in house prices. Accordingly, the real estate sector recorded the fastest contraction in small business job vacancies, with a fall of 5.01% in July.

“In June, the CPI inflation reached 7.9%, with the highest inflationary pressure seen in the ‘food and beverages’ category, reaching 17.4%. This sharp increase in inflation was reflected in the sector's performance, which experienced a 4.66% decline in job vacancies, making it the second-fastest contraction observed in the Index.

“Analysing different regions, the Intuit QuickBooks Small Business Index revealed that all four UK nations experienced a contraction in small business job vacancies, with Northern Ireland being the hardest hit, with a 5.65% drop. This contraction erased the gains seen in the previous month, bringing job vacancies in Northern Ireland back to levels similar to when the Index was launched in March 2023. Additionally, Scotland saw a significant decline in job vacancies, with a net loss of 400.

“The simultaneous contraction in job vacancies across all regions and most sectors indicates the impact that tighter credit conditions and decreased consumer demand are having on some small businesses. Given the crucial role of small businesses in the UK economy, especially in terms of their sheer number and their employment, we encourage policymakers to remain focused on their business health.”

Get all the details from the interactive Small Business Index dashboard.

More information

Media inquiries

Media contact details for QuickBooks in the UK can be found here on the QuickBooks UK website.

USA Index

The Intuit QuickBooks Small Business Index is also published monthly in the US. Get the latest small business employment insights for the US here. 

Canada Index

The Intuit QuickBooks Small Business Index is also published monthly in Canada. Get the latest small business employment insights for Canada here.

About the Index

The Intuit QuickBooks Small Business Index is a timely new measure of small business employment and hiring in the UK, the US and Canada. The Index launched in March 2023 and is updated monthly. The Index uses purpose-built economic models to normalise anonymised QuickBooks data to reflect the general population of small businesses in each country; it is not a reflection of Intuit’s business. The Index was developed in collaboration with leading economist Professor Ufuk Akcigit and an international team of researchers and academics.

Intuit QuickBooks Small Business Index: Overview

Methodology

The Intuit QuickBooks Small Business Index creates aggregated data outputs from a sample of anonymised QuickBooks Online Payroll customer records which are calibrated using statistical methods to create modelled 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.

Read more or download the full methodology.

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.

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.

Time series

The Index uses data going back to January 2018 in the UK and to January 2015 in the US and Canada. Published at the earliest opportunity every month, the Index shows the number of job vacancies at small businesses (in the UK) or the number of people employed by small businesses (in the US and Canada) in the previous month and how that number has changed since the month before. The Index helps to eliminate almost all of the time lags in official statistics 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 UK sample is almost 25,000 small businesses. The US sample is almost 333,000 small businesses. The Canadian sample is almost 66,000 small businesses. The minimum sample sizes for regions or sectors to be included in the Index are 200 small businesses in the UK, 1,000 small businesses in the US and 800 small businesses in Canada. 

Target populations

In the UK and US, the Index targets the populations of small businesses with one to nine employees. In Canada, the target population is small businesses with one to 19 employees. The differences ensure the Index’s data insights are consistent with official statistics in each country, which are used for benchmarking during the calibration process. Timely data insights for these populations of small businesses are particularly valuable since most datasets fail to cover this portion of the economy well. Please note: Unlike in the US and Canada, the UK Index uses job vacancy data for calibration rather than employment data because official employment statistics are not currently available for small businesses on a monthly basis. 

External data sources

External data sources used alongside the samples of anonymized QuickBooks Online Payroll customer data include:

• UK Office for National Statistics job vacancy data

Geographic regions

• In the UK, data insights are currently available at the country level (England, Scotland, Wales, Northern Ireland) — not regionally within countries

Industry sectors

In the UK, data insights are available by UK Standard Industrial Classification of Economic Activities (SIC) sectors (known as “sections”)

Disclaimer

This content is for information purposes only and should not be considered legal, accounting or tax advice, or a substitute for obtaining professional advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by region, state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit does not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. Readers should verify statements before relying on them.

We may occasionally provide third-party links as a convenience and for informational purposes only. Intuit does not endorse or approve  the views or opinions of any corporation or organisation or individual herein. Intuit accepts no responsibility for the accuracy, or legality, of third-party  content.