New small business data highlights severity of UK employment crisis

by Startacus Admin

Xero SBI data reveals that job losses continue despite sales recovery

The global small business platform, Xero has released new metrics on the health of the UK’s small business community in July from its Small Business Insights (SBI) program, in partnership with research firm AlphaBeta (part of Accenture).

Based on anonymised and aggregated customer data, the latest Xero SBI data shows that UK small business jobs fell a further 2% in July as the Government began phasing out the furlough scheme, despite revenue showing some signs of recovery.

While revenue for businesses in the hospitality sector remained 39% lower than July 2019, it has shown tentative signs of recovery as pub and restaurant service resumed, although social distancing restrictions continue to negatively impact sales in some cases.
Revenue across the small business sector showed continued signs of improvement from its worst month in May.

The data shows that the manufacturing sector is leading the economic bounceback, with revenue now 1% higher than it was in July 2019. Construction has followed a similar pattern. However, employment remains below pre-crisis levels in both industries, with the information media and telecommunications sector the only industry to experience an increase in employment compared to July 2019.

Regionally, while small businesses in all regions of the UK reported lower employment figures than in March, the regions most impacted in July were the West Midlands, East Midlands and North West, influenced by the local lockdowns taking place around this time.

South East England, London and East England however all recorded results better than the national average of a 7% drop since March.

Gary Turner, managing director of Xero, commented: “Our data is showing some semblance of a bounce back compared to when we first went into lockdown. But it’s concerning to see that employment amongst small businesses is still falling. It would be tragic if the furlough scheme has just delayed the impact, rather than acted as a bridge to recovery.

“Over half of our GDP comes from small businesses. They’ve shown huge resilience in recent months, so it would be hugely damaging to our economy if they don’t get the continued support they need as they recover.”

Xero has identified the key areas of Government support needed by small businesses in order to rebuild via its Roadmap to Recovery manifesto.

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Published on: 1st September 2020