What a nearly 3% decrease means for you
The UK is home to more than five million small businesses that create well-paying, stable jobs for Britons and their families. Despite these firms’ importance to the economy, they are often underrepresented in traditional macroeconomic data. Small business labour and hiring markets are also leading indicators which give accountants, policymakers and small business owners important insights into our economy.
The Intuit QuickBooks Small Business Index fills this gap. Since March, with the help of internationally-recognised economist Professor Ufuk Akcigit, Intuit has been publishing a timely measure of small business employment and hiring in the US, Canada, and the UK. The latest release shows the number of vacancies in UK small businesses was down by nearly 3% in May.
Because many small business owners are occupied with the daily running of their ventures, keeping up with the latest economic conditions can be challenging. However, the Index is widely accessible and provides data for free and without requiring a subscription. This allows small business owners to take charge of their businesses while understanding the complexities of macroeconomic data. As an accountant, being equipped with these insights – on a regional and sector level – will help you to better understand the landscape your small business clients face to support their operational needs.
In May, UK small businesses with one to nine employees had 4,400 fewer job vacancies compared to the previous official benchmark of 154,000 in April’s Vacancy Survey, published by the Office for National Statistics. That’s a monthly decrease of -2.90% to 149,600 job vacancies in the UK— doubling April’s reported decrease of -1.42%.
Small business job vacancies fell in 75% of sectors. The largest decreases in transport and storage experienced the most substantial decrease of -6.19% to 9,600 job vacancies. Meanwhile, the arts, entertainment and recreation sector saw a 2.63% increase to 5,700 job vacancies.
Demontrating your value to small business clients
A decrease in job vacancies suggests small businesses are scaling back growth plans and feeling greater financial pressure right now. Accountants can help by helping them to cut costs and secure funding and, in general, it's an important time for accountants to be demonstrating their value to small business clients who may be looking to cut costs.
The Index reveals the number of job vacancies at firms with one to nine employees and measures how that figure has changed since the previous month. These insights are available for each nation (England, Northern Ireland, Scotland, Wales) and by sector. The Index uses purpose-built economic models to normalise anonymised QuickBooks data against official government statistics to reflect each country’s general population of small businesses. Updated monthly, the Index provides near real-time data insights focusing on the smallest of small businesses. This is not survey data, but real small business data providing unique insights into the health of the small business economy.
This also allows small businesses to compare their hiring data against the Index for a performance assessment within the broader economy. For example, in March, England had the most significant decrease in job vacancies in the UK, dropping -3.12% to 132,500. Wales had the smallest decline, down by -1.27% to 5,400 job vacancies. Scotland was the only region that experienced an increase in small business job vacancies, with an uptick of 1.01% to 9,600.
Effect of inflation and rising interest rates
‘Persistent inflationary pressure has led the market to anticipate further interest rate hikes, creating increasingly challenging conditions, particularly for small businesses,’ noted Professor Ufuk Akcigit on this month’s Index. ‘These prevailing trends are evident in the vacancy numbers of small businesses in the UK.’
Accountants and their small business clients can use the Index’s cutting-edge labour market aggregations to evaluate the macroeconomic environment and health of micro-entities. The Index’s interactive nature creates the ideal environment for stakeholders to assess the UK economy and small firms with ease in one fell swoop.
The Intuit QuickBooks Small Business Index is published at the earliest opportunity every month. Get the latest small business data insights sent to your inbox on 10 July.
Use our small business guides to market your practice to this growing sector:
Essential guide to basic bookkeeping
Essential guide to income tax self-assessment