Analysing a near 5% drop in March
Small businesses are engines of economic growth. They contribute significantly to job creation, innovation, productivity, business, dynamism and competition. They are also early indicators of aggregate trends in the economy.
But gauging how small businesses are faring can be a tricky endeavour. With the introduction of the Intuit QuickBooks Small Business Index in March 2023, we now have publicly available data insights on the performance of firms with fewer than ten employees.
Many small business owners are so consumed with the day-to-day running of their venture, it can be a challenge to keep up with the latest economic insights. But getting to grips with the latest hiring and employment data is important. It can help to spot the ‘big picture’ issues early and make informed decisions. 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 are operating in, and ultimately better support them.
To accurately assess the state of small firms across sectors, regions and economies, accountants, policymakers and other professionals must have access to timely economic data. Without a clear understanding of small businesses’ economic performance, stakeholders cannot make informed decisions that foster sustainable growth and account for the needs of small businesses.
The Intuit QuickBooks Small Business Index was created in partnership with internationally recognised economist Ufuk Akcigit, the Arnold C. Harberger Professor of Economics at the University of Chicago, to provide a timely measure of small business employment and hiring in the US, Canada and the UK.
The Index uses purpose-built economic models to normalise anonymised QuickBooks data to reflect the general population of small businesses in each country. Updated monthly, the index provides near real-time data insights at a regular cadence and focuses on the smallest of the small businesses which are often overlooked in official data sources.
The Index shows 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 of the four nations (England, Northern Ireland, Scotland, Wales) and by sector as well.
This allows small businesses to compare their hiring data against the Index for a performance assessment within the broader economy. For example, in March, Northern Ireland had the most significant decrease in job vacancies in the UK, dropping 9.54% to 2,100. England had the smallest decline, down by 3.26% to 130,600 job vacancies.
Additionally, in March, UK small businesses with one to nine employees had 7,400 fewer job openings compared to the previous reading of 152,000 in February’s Vacancy Survey, published by the Office for National Statistics. That’s a monthly decrease of 4.98% to 144,600 job vacancies – a more significant reduction than in the previous month, when vacancies dropped by 2.5%.
While the decline was observed in every sector, the arts, entertainment and recreation sector experienced the sharpest drop by 11.4%. The education sector observed the mildest decline of 0.65%.
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. Greater access to information, especially in a complex economy, will yield more informed decision-making.
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 5 May.