Small Business Growth Is Still Tepid, but Construction Revenues Are Up
Small businesses added 10,000 new jobs in March, while average monthly hours worked by employees increased by 18 minutes. The latest results of the Intuit Small Business Employment and Revenue Indexes showed American small business employment increased by 0.06 percent from February’s findings, while overall revenue declined 0.6 percent in February.
Employment: Still a Long Way to Go
Though small businesses are slowly adding jobs, we're a long way from a full recovery, according to Susan Woodward, the economist who worked with Intuit to create the indexes. “Small business expansions tend to follow expansions in self-employment,” says Woodward. “Data from the Bureau of Labor Statistics shows self-employment fell for nearly five full years starting in 2007. About 14 million people are self-employed, and that figure decreased by 60,000 in February alone.”
At the state level, there is no clear geographic pattern in March’s employment gains, though Woodward emphasizes that monthly fluctuations are larger for smaller states. Among the 34 states tracked by Intuit’s Employment Index, 24 states showed employment increases, one remained flat, and nine showed declines. In line with February's findings, Nevada saw the largest increase. Alabama, Wisconsin, and Illinois showed the greatest declines.
Monthly hours worked per employee went up slightly, to 108.3 hours in March, but are below where they were several months ago. Average monthly compensation per employee continues to rise, and has not fallen since mid-2009. In March, the average monthly wage for hourly workers was up 0.4 percent, or $12.
February Revenues Decline
Small business revenues continued to decline in February, according to Intuit’s Small Business Revenue Index, which showed a 0.6 percent decline on a per business basis. The biggest declines were seen in the retail and professional services industries, at 0.9 percent each. Health care revenues declined the least, at 0.13 percent. “The only two industry sectors where average revenue rose over the last year and last month are the construction and real estate services industries. They are both benefiting from the small but clear recovery in construction,” said Woodward.
This index is based on data from QuickBooks Online and covers the period from Feb. 1 to Feb. 28.
As small businesses slowly recover, Intuit and LinkedIn are hosting the Hire Smart Small Business Event to help employers make the right hiring decisions. The free event will be held at Intuit’s Mountain View, Calif. campus on April 27 and will be streamed live online. The event will offer guest speakers, expert advisors, and free resources to assist new and growing businesses. To register, visit HireSmartNow.com.
Tammy Lam is a business writer for Intuit and is passionate about solving small business problems.