Following a further 0.1% GDP recovery as the UK continues to climb out of a recession, new research has revealed the industries that made the fewest redundancies in the last year.
This GDP increase shows that the UK is continuing to gradually recover from the economic turmoil caused by COVID-19 and the cost-of-living crisis that lost and put many jobs at risk.
Some industries have managed to ride this wave better than others, but only some industries are experiencing growth in these tougher times and some have been forced to make more redundancies than others.
The money.co.uk business bank accounts experts have analysed government data to reveal which industries recorded the fewest redundancies in 2023.
The UK industries with the lowest redundancy rate:
| Rank | Industry | Level | Rate |
| 1 | Professional, scientific & technical activities | 6,000 | 2.7% |
| 1 | Human health & social work activities | 12,000 | 2.7% |
| 2 | Wholesale, retail & repair of motor vehicles | 13,000 | 4.2% |
| 3 | Accommodation & food services | 10,000 | 6.0% |
| 3 | Financial, insurance & real estate activities | 11,000 | 6.0% |
| 4 | Other services | 8,000 | 6.5% |
| 5 | Manufacturing | 17,000 | 6.9% |
| 6 | Construction | 10,000 | 7.3% |
| 6 | Transport & storage | 10,000 | 7.3% |
| 7 | Administrative & support services | 8,000 | 7.7% |
| 8 | Information & communication | 19,000 | 12.8% |
- Professional, scientific & technical activities: Two industries are tied for the lowest redundancy rates, with 2.7%. The first is professional, scientific and technical activities with fewer overall redundancies, at 6,000. This low rate could be due to the essential nature of many roles within this sector. These include legal services, accounting, engineering, and research and development jobs, which maintain demand even in challenging economic times.
- Human health & social work activities: The human health and social work activities sector also had a rate of 2.7% redundancies, although it had double the job losses of professional, scientific and technical activities – at 12,000. The critical nature of health and social services could be why redundancy rates for these jobs are so low. This is especially true in crises, such as the cost of living crisis and the COVID-19 pandemic, when more people need support from this sector.
- Wholesale, retail & repair of motor vehicles: The wholesale, retail and repair of motor vehicles sector ranks third, with a redundancy rate of 4.2%. This sector includes various activities, including selling new and used vehicles, parts and accessories, maintenance and repair services, and even fuel sales. Motor vehicles play a critical role, not just in terms of employment but also in keeping the rest of the economy moving and providing essential services.
It’s essential to understand which industries offer the best opportunities before starting a new business venture.
Kyle Eaton, money.co.uk business bank accounts expert, offers his tips to prospective business owners on how to pick the right industry:
“Picking the right industry is the most crucial step for any prospective business owner. Here are some tips to guide you through this process:
- Conduct thorough market research: Before diving into an industry, it’s essential to understand the market dynamics, competition, customer needs, and trends. Speak to your target audience via surveys and focus groups and look at sources like industry reports and news articles to gather comprehensive insights. This will help you identify gaps in the market that your business could fill.
- Assess your skills and interests: Choose an industry that aligns with your skills, experience, and passions. Running a business in an area you’re enthusiastic about can be more fulfilling and may increase your chances of success. Consider industries where you can leverage your strengths and expertise.
- Evaluate market viability and longevity: Look for industries with long-term growth potential. Emerging trends can offer opportunities, but it’s essential to differentiate between a fleeting trend and a sustainable market. Consider sectors that are resilient to economic fluctuations and have a steady demand.
- Understand regulatory requirements: Different industries have different regulatory landscapes. Be aware of the regulations, licences, and permits required for your chosen industry. Failure to comply with legal requirements can lead to fines or business closure.
- Financial planning and access to capital: Some industries require more start-up capital than others. Assess your financial resources and the availability of external funding, such as loans or investor capital. Create a detailed business plan that outlines your funding requirements, revenue projections, and financial strategies.
- Assess the competition: Identify your potential competitors and analyse their strengths and weaknesses. Understanding the competitive landscape can help you position your business uniquely and identify areas where you can offer better value or innovation.
- Sustainability and social responsibility: Consumers increasingly favour businesses prioritising sustainability and social responsibility. Consider how your business can adopt sustainable practices and contribute positively to society. This can also be a differentiating factor in your industry.
- Leverage technology: No matter your chosen industry, technology will likely play a key role in your operations. Explore how you can use technology to streamline processes, enhance customer experiences, and improve efficiency.
- Network and seek advice: Build a network of mentors, advisers, and peers within your chosen industry. Their insights and experiences can be invaluable in navigating the early stages of setting up your business and avoiding common pitfalls.
- Prepare for flexibility and adaptation: The business landscape is constantly changing, so it’s crucial to remain adaptable. Be prepared to pivot your business model, products, or services in response to market changes or new opportunities.
“Selecting the right industry and researching thoroughly before setting up your business can set the foundation for a successful venture. Remember, success doesn’t happen overnight, and perseverance, adaptability, and continuous learning are key.”
