Small businesses create almost 30,000 new jobs in Q1-2025

The latest quarterly data from the Small Business Index shows rising employment at the UK’s small businesses in the first three months of 2025. This is the second consecutive quarterly increase. Businesses with 1-9 employees now employ 4,241,500 people, which is 28,700 more than the previous quarter.

Looking at longer-term trends, small business employment remains above the pre-pandemic level but has trended downward since Q2-2021, as the chart below shows. All data is seasonally-adjusted.

Wholesale and retail trade sector creates the most small business jobs

All 13 sectors covered by the Index show rising employment at small businesses in Q1-2025.

The wholesale and retail trade sector (SIC G) had the most growth, creating 5,200 jobs. Similarly, the latest available data from the Office for National Statistics (ONS) shows retail sales volumes grew by 1.4% in January  and by 1% again in February. February sales were at their highest volume since July 2022 according to the ONS. 

As the table below shows, two other sectors with notable growth in Q1-2025 were the professional services sector (SIC M) and the construction sector (SIC F). The latest available quarterly data for the construction sector is only available through January, but shows a 0.4% increase in construction output over that period.

On a quarterly basis, small business employment in the real estate sector (SIC L) is now higher than at any point since Q2-2018—when the Index’s records begin—with total employment now at 168,400.

East of England has the fastest-growing small business employment in the UK

Across all the regions and nations of the UK, the East of England had the fastest growth rate in Q1-2025, at 1.04%, creating 4,000 jobs at small businesses. Across England as a whole, small businesses created 25,900 jobs. More than 11,000 of these jobs were added in London and the South East. See the table below for details. 

Methodology

For more information about the sample, data sources, and calculations used in the Small Business Index, read the full methodology here.

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