Small business employment holds nearly flat in Q1-2026—but the sector picture is more divided

Q1-2026 small business highlights:

• UK small businesses employed 4,153,900 people in Q1-2026. 

• Small business employment decreased by 500 jobs compared to Q4-2025, a quarterly decline of 0.01%—essentially flat. 

• Jobs decreased in 3 of 13 sectors, with healthcare and social work seeing the largest decrease. 

• Employment decreased in 1 of 4 nations and 3 of 9 English regions. 

• Job vacancies decreased by 8,500 (-7.33%), reversing two consecutive quarters of vacancy growth.

UK small business employment fell by just 500 jobs (-0.01%) in Q1-2026. At the national level, that's essentially flat. But look beneath the surface and the picture is more divided.

Job vacancies fell more meaningfully—down 8,500 open positions (-7.33%), reversing two consecutive quarters of vacancy growth.

Quarterly trends by sector

Ten of 13 sectors tracked by the Index added jobs in Q1-2026—a broadly positive employment picture. Information and communication (SIC J) led growth, adding 2,300 jobs at the fastest rate of any sector (1.20%). Accommodation and food services (SIC I) wasn't far behind, adding 2,500 jobs (0.57%).

The declines were concentrated in two large sectors. Healthcare and social work (SIC Q) shed 7,600 jobs (-1.25%)—the largest drop and steepest rate of decline of any sector. Professional services (SIC M) lost 2,800 jobs (-0.49%). Together, those two sectors account for the bulk of the overall decline.

On vacancies, nearly every sector saw open positions fall. The standout exception: administrative and support services (SIC N) was the only sector to post vacancy growth (+2.23%). Construction (SIC F) saw the steepest vacancy decline of any sector (-21.63%), dropping 300 open positions.

See the tables and charts below for full sector details.

Quarterly trends by nation

Three of the four nations of the UK added small business jobs in Q1-2026—with England as the outlier. Wales posted the fastest growth (1.00%) and Scotland had the largest absolute gain (+2,000 jobs, +0.64%). Jobs in Northern Ireland also grew (+0.57%).

England, home to the vast majority of UK small businesses, saw a slight employment decline (-4,500 jobs, -0.12%)—enough to drag the national total into negative territory despite growth across the other three nations.

Vacancies fell across all four nations. England saw the largest drop, losing 8,000 open positions (-7.38%).

See the tables and charts below for full details.

Quarterly trends by region

Six of nine English regions grew small business employment in Q1-2026, but two larger regions pulled the overall number down. The South East shed 7,000 jobs (-1.12%)—the steepest rate of decline of any English region and a notable drag given its size. London also declined, losing 4,300 jobs (-0.54%).

Among the growers, the North West had the largest gain (+3,600 jobs, +0.88%) and the East Midlands posted solid growth as well (+2,000 jobs, +0.74%).

Vacancies fell across every English region. The North East (-9.69%) and North West (-8.57%) saw the fastest declines.

See the tables and charts below for full details.

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