Small biz job vacancies fall 6th consecutive month – Finance only sector with job creation
In the UK in July, small businesses with one to nine employees had 4,800 fewer job vacancies nationally. That’s a monthly decrease of 3.31% to 142,200 vacancies compared to the previous official benchmark of 147,000 in June’s Vacancy Survey, published by the Office for National Statistics.
Finance and insurance is the only sector that saw job creation this month
Twelve out of the 13 sectors covered by the Intuit QuickBooks Small Business Index posted fewer job vacancies in July compared to June.
Finance and insurance (UK SIC K) was the only sector to grow, creating 100 new job opportunities in small businesses — a monthly increase of 0.60% to a total of 6,600 vacancies nationwide. This sector includes pension funds and consumer credit businesses as well as insurance companies.
The three sectors with the largest overall declines in small business job vacancies in July were:
Education (UK SIC P): down by 500, with a monthly decrease of 3.23% to 14,000 job vacancies. This sector includes business training, sports coaching and language tuition as well as schools and universities.
Professional services (UK SIC M): also down by 500, with a monthly decrease of 2.96% to 17,800 job vacancies. This sector includes law, accounting, engineering, architecture and scientific research.
Wholesale and retail (SIC G): also down by 500, with a monthly decrease of 2.62% to 19,100 job vacancies. This sector includes all product-based businesses that either sell to retailers or directly to consumers.
Another sector which contributed to the overall decline in small business job vacancies in July was the real estate sector (UK SIC L). There are currently 5,000 vacancies in this sector, which is 300 fewer than in June — a monthly decrease of 5.01%. This is the fastest rate of decline across all sectors. Businesses in this sector are involved in the buying, selling and leasing of land, homes and buildings.
Small business hiring fell fastest in Northern Ireland
Small business job vacancies were down in all four UK nations in July, with Northern Ireland seeing the fastest rate of decline:
Northern Ireland: down by 5.65% to 2,100 vacancies — 100 fewer than in June.
Scotland: down by 4.17% to 8,700 vacancies — 400 fewer than in June.
England: down by 3.29% to 126,300 vacancies — 4,200 fewer than in June.
Wales: down by 2.57% to 5,000 vacancies — 200 fewer than in June.
Ufuk Akcigit, the Arnold C. Harberger professor of economics at the University of Chicago, said: “In October 2022, UK inflation reached its peak at 11.1%. Since then, it has been on a slow decline and dropped to 7.9% in July 2023. However, this figure remains significantly higher than the Bank of England’s target of 2%. To combat inflation, the Bank of England has continuously raised the Bank Rate, reaching a 15-year high of 5% in July 2023.
“Unfortunately, this high inflationary environment, coupled with rising interest rates, can create challenges for small businesses and their access to credit. The tightening credit conditions and fragile demand have likely contributed to the 3.31% contraction in job vacancies for firms with 1-9 employees in July compared to the previous month, as reported by the Intuit QuickBooks Small Business Index. This decline marks the fifth consecutive month of contraction.
“According to the Index, every sector except finance and insurance has experienced a contraction in July. The tightening credit conditions have adversely affected the housing market, leading to a significant decline in house prices. Accordingly, the real estate sector recorded the fastest contraction in small business job vacancies, with a fall of 5.01% in July.
“In June, the CPI inflation reached 7.9%, with the highest inflationary pressure seen in the ‘food and beverages’ category, reaching 17.4%. This sharp increase in inflation was reflected in the sector’s performance, which experienced a 4.66% decline in job vacancies, making it the second-fastest contraction observed in the Index.
“Analysing different regions, the Intuit QuickBooks Small Business Index revealed that all four UK nations experienced a contraction in small business job vacancies, with Northern Ireland being the hardest hit, with a 5.65% drop. This contraction erased the gains seen in the previous month, bringing job vacancies in Northern Ireland back to levels similar to when the Index was launched in March 2023. Additionally, Scotland saw a significant decline in job vacancies, with a net loss of 400.
“The simultaneous contraction in job vacancies across all regions and most sectors indicates the impact that tighter credit conditions and decreased consumer demand are having on some small businesses. Given the crucial role of small businesses in the UK economy, especially in terms of their sheer number and their employment, we encourage policymakers to remain focused on their business health.”
Get all the details from the interactive Small Business Index dashboard.
