Small Business Index Reveals A Slowing Job Market

QuickBooks Small Business Index Reveals Decline and Stagnation in UK SMB Employment and Vacancies for September 2024

Intuit’s latest Small Business Index for September 2024, confirms a slowing job market based on its sample of 25,000 UK small businesses with one to nine employees, with a decrease in employment of approximately 1400 jobs and fewer open positions.

Job vacancies in UK small businesses dropped by 0.08%, with 100 fewer open positions, while employment saw a slight decline of 0.03%, translating to a loss of around 1,400 jobs. This equates to 10,000 fewer UK jobs in the UK SMB sector than 12 months ago. This downturn reflects the broader slowdown in the UK labour market, where wage growth has hit its lowest point in over two years. According to the latest figures from the ONS UK Labour Market Overview for October 2024, the number of estimated vacancies across the UK fell sharply between July and September 2024.

The QuickBooks Small Business Index highlights that all sectors either experienced job losses or remained stagnant, with manufacturing, accommodation and food services, and education seeing the most significant declines. This contraction in job vacancies reflects a broader hiring hesitation, as businesses face uncertainty over potential policy changes from the new Labour government ahead of the Autumn budget.

The North East of England saw the fastest decline in employment, losing 300 jobs, while the West Midlands provided a rare bright spot, with a slight rise in both employment (200 jobs) and job vacancies (100 openings).

The slowing job market comes amid growing speculation that the Bank of England will cut interest rates in November. Wage growth has dropped to 4.9%, the lowest since 2022, adding to expectations that the Bank will reduce rates to 4.75%. This could provide relief to businesses struggling with high borrowing costs, though uncertainty still lingers.

Simon Worsfold, Head of Data Communications at Intuit said, “The latest ONS Labour Market figures and our Small Business Index reflect a delicate period for small businesses, with marginal declines and stagnation in employment highlighting the cautious outlook many have as they await the results of the upcoming budget."

"The mixed performance across regions and sectors underscores the need for targeted policies that stimulate growth, while addressing the broader economic challenges facing the UK.”