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Intuit QuickBooks Small Business Index, October 2023
8 min read
-2,100 job vacancies | -1.33%
In the UK in September, small businesses with one to nine employees had 2,100 fewer job vacancies nationally. That’s a monthly decrease of 1.33% to 153,900 vacancies compared to the previous official benchmark of 156,000 in August’s Vacancy Survey, published by the Office for National Statistics.*
The lingering effects of high interest rates...continue to strain small businesses…the Intuit QuickBooks Small Businesses Index indicated a contraction of 1.33% in job vacancies for firms with 1-9 employees, translating to a decrease of 2,100 vacancies.
Small business job vacancies decline in all but one sector
Twelve of the 13 sectors covered by the Intuit QuickBooks Small Business Index in the UK posted fewer small business job vacancies in September compared to August. Real estate (SIC L) stands out as the only sector with growth: now with 5,800 small business vacancies nationally, an increase of 100 (2.24% growth) since the previous month.
The three small business sectors with the largest declines in September were:
Education (SIC P): down by 600, with a monthly decrease of 4.27% to 13,900 job vacancies. This sector includes business training and sports coaching as well as schools and universities.
Wholesale and retail (SIC G): down by 300, with a monthly decrease of 1.36% to 20,700 small business job vacancies. This sector includes all product-based businesses that sell to retailers or directly to consumers.
Accommodation and food services (UK SIC I): down by 200, with a monthly decrease of 2.10% to 10,500 small business job vacancies. This sector includes hotels, pubs, coffee shops and restaurants.
Small business vacancies fell fastest in England but increased in Northern Ireland
Small business job vacancies were down in three out of the four UK nations in September, with England seeing the fastest rate of decline.
England: down by 1.63% to 136,300 vacancies.
Wales: down by 1.32% to 5,400 vacancies.
Scotland: down by 0.57% to 9,600 vacancies
Northern Ireland: up by 0.98% to 2,400 vacancies.
Ufuk Akcigit, the Arnold C. Harberger Professor of Economics at the University of Chicago, said: “The lingering effects of high interest rates combined with inflationary pressures continue to strain small businesses. Borrowing continues to be expensive, and utility costs are on the rise. Reflecting these challenges, the Intuit QuickBooks Small Businesses Index indicated a contraction of 1.33% in job vacancies for firms with 1-9 employees, translating to a decrease of 2,100 vacancies. Despite this negative picture, there are still reasons to be optimistic looking ahead. First, according to the Index, September and August showed noteworthy improvements from the prolonged period of contraction observed in the previous months. Second, CPI inflation has continued its downward trend, measuring a 6.7% increase in prices annually in August compared to the 2023 peak of 10.4% in February. Third, the recent government policies announced to help small businesses get paid faster is a step in the right direction as they estimate that late payments to small businesses account for a loss of £2.5B annually for the overall economy. While the overall job vacancy scenario in the UK presents challenges, pockets of resilience and growth offer hope for a more balanced rebound in the coming months.
“With the exception of Northern Ireland, all UK countries are experiencing a contraction in job vacancies. The Index highlights Northern Ireland as a standout from this trend, with job vacancies experiencing 0.98% growth this month. This aligns with data from the Office of National Statistics, which indicates that the region has consistently held the lowest unemployment and the highest economic inactivity rate in recent months.
“In contrast, England witnessed the fastest contraction at 1.63%, which also translated to the largest net change in vacancies among all regions. According to ONS, the quarterly unemployment rate of England has been above average and also increasing since February 2023.
“Sector-wise, the situation appears challenging, with vacancy numbers in all sectors contracting except for the real estate sector. Housing prices are dropping at the sharpest level in 14 years, which creates purchasing opportunities for some households and increases demand for real estate services from both sides. This development aligns with the observation in the Index that the real estate sector saw an impressive growth of 2.24% in job vacancies. However, some sectors are feeling the pinch more than others. Due to the present unfavourable macroeconomic conditions and the resulting high borrowing costs, the finance and insurance sector was affected negatively. The Intuit QuickBooks Small Businesses Index reported a contraction of 2% in job vacancies for this sector. Likewise, the accommodation and food service sector contracted by 2.10%, while the education sector registered the most substantial decline at 4.27%, resulting in a reduction of 600 vacancies.”
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.
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.
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.
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.
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.
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.
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.
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:
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