Why is Texas Leading in Small Business Employment?
American small businesses added 20,000 jobs in April, according to the latest Intuit Small Business Employment and Revenue Indexes. The number of small business jobs added totals approximately 320,000 jobs since March 2010. Despite the rise in employment, average monthly hours worked and compensation declined slightly. Small business revenue overall declined 0.4 percent on a per-business basis.
Jobs Added, Compensation and Hours Drop
“Small business employment growth is still slow,” reports Susan Woodward, the economist who worked with Intuit to create the indexes. “National employment saw 1.4 percent growth last year, while small business employment grew at only 0.3 percent. Despite a slight rise in employment numbers, the hiring rate remains flat, at the same low level we have seen since mid-2009."
While Utah leads the pack in April’s employment gains, the West South Central census division, dominated by Texas, has been leading the recovery overall, reaching nearly the same level of employment as in mid-2008. Texas’s unusual mortgage law, which limited cash-out refinancing to an 80 percent loan-to-value ratio, may have spared the state from the worst of the defaults and the consequent decline in house values.
The average monthly hours worked by small business employees dropped 0.8 percent in April, to 104.9 hours, while average monthly pay dropped 0.4 percent. This is the fifth month that compensation has declined.
Overall Revenue Down, Except Construction
“Over the past year, construction has seen 2 percent growth on a revenue-per-business basis,” says Woodward. “But across all industries, revenues per business were 0.2 percent below where they were a year ago.”
The real estate and professional services industries saw the greatest revenue declines in March, at 1.2 percent and 0.9 percent respectively. Revenue in the “other services” sector declined the least in March, at 0.1 percent, followed by health care at 0.3 percent.
This index is based on data from QuickBooks Online and covers the period from Feb. 1 to Feb. 28.
For more information on the state of small business employment and revenue, visit index.intuit.com.