Small Business Employment Continues Slow Growth
Construction to Play a Central Role in Recovery
MOUNTAIN VIEW, Calif. – Mar. 04, 2013 – U.S. small business employment increased slightly in February, with employees earning more money and working more hours. Small business revenues continue to drop, with the retail industry seeing the largest decline.
"Small business employment has risen by 75,000 jobs from this same time last year," said Susan Woodward, the economist who worked with Intuit to create the indexes. "However, if small business employment were growing at its usual proportionate rate of 15 percent of national employment, that number would be 300,000 –a 400 percent difference.
"The housing bust that was at the center of the economic collapse hurt small business much more than it did big business. In non-recession times, construction industry jobs make up about five percent of all employment, but it comprises nearly 20 percent of jobs in the small business and self-employed segment. Single-family home construction, which was at 2 million houses per year in 2006, is now below 900,000 per year. Until construction truly recovers, we will not see robust recovery in small business employment."
The Intuit Small Business Employment Index shows a 0.07 percent increase in employment for February. The Employment Index reflects data from approximately 170,000 small business employers, a subset of small businesses that use Intuit Online Payroll and QuickBooks Online Payroll. The month-to-month changes are seasonally adjusted and informative about the overall economy. The National Employment Index is from the Bureau of Labor Statistics.
Increase in Hours Worked, Compensation
Small business hourly employees worked an average of 109.4 hours in February, up slightly from the revised figure of 109.2 hours in January, making for a 25.3-hour workweek.
Small Business Employee Monthly Hours Worked for hourly employees increased by 0.17 percent in February. The levels reflect data from approximately 490,000 hourly employees of the Intuit Online Payroll and QuickBooks Online Payroll customer set of approximately 170,000 small businesses and is not necessarily representative of all small businesses. The month-to-month changes are seasonally adjusted and informative about the overall economy.
Average monthly pay for small business employees increased to $2,745 in January, up 0.4 percent from the January revised figure of $2,733 per month. The equivalent annual wages would be about $32,900 per year, which is part-time work for almost half of small business employees.
Small Business Employee Monthly Compensation for all employees shows compensation increased by 0.4 percent in February. This data includes the compensation paid by small business owners to themselves. The levels reflect data from approximately 800,000 employees of the Intuit Online Payroll and QuickBooks Online Payroll customer set of 170,000 small businesses, and are not necessarily representative of all small business employees. The month-to-month changes are seasonally adjusted and informative about the overall economy.
Small Business Employment by Geography
A state-by-state breakdown of employment growth showed mixed results in February. Among the 34 states tracked by Intuit's Small Business Employment Index, employment increased in 13, remained flat in three and declined in 18. Continuing a trend seen in January's findings, Utah and Nevada saw the largest increases. Alabama, Indiana and Kentucky showed the greatest declines.
Small Business Employment results were mixed for the states in which Intuit Online Payroll and QuickBooks Online Payroll has more than 1,000 small business firms. The month-to-month changes are seasonally adjusted and informative about the overall economy.
January Small Business Revenue Decline
The January Small Business Revenue Index showed a 0.6 percent overall revenue decline on a per business basis.
"Small business revenues recovered through early 2012, but have since begun to decline, with the health care and the accommodation and food services industries being the first to go," said Woodward. "The sectors with the smallest declines - almost a recovery by comparison - are construction and real estate services, down less than 1 percent each. This is encouraging for small business employment, for which construction plays a central role."
The small business retail industry saw the greatest revenue decline, at 1.3 percent in January and has seen a 5.3 percent decline since its peak in February 2012. Health care revenues declined 0.5 percent in January, and 3.7 percent since its peak in March 2012. The accommodation and food services sector was down 0.3 percent in January, a 2.2 percent decrease since its peak in March 2012. This index is based on data from QuickBooks Online.
The Intuit Small Business Revenue Index is based on data from more than 100,000 small businesses, a subset of the total QuickBooks Online financial management user base.
About The Intuit Small Business Indexes
The Intuit Small Business Indexes provide unique, near real-time information each month on the activity of the smallest businesses in the U.S. in terms of revenue, hiring and compensation trends. The Employment Index is based on anonymized, non-identifiable aggregated data from 170,000 small business employers, a subset of users that use Intuit Online Payroll and QuickBooks Online Payroll. The Revenue Index is based on anonymized, non-identifiable aggregated data from approximately 100,000 small businesses, a subset of users that use Intuit's QuickBooks Online financial management offering and are matched in Dun & Bradstreet's small business industry classifications. Together, the indexes provide a more complete picture of the economic health of the nation's small businesses. More information on the Intuit Small Business Indexes is available at index.intuit.com.
About Intuit Inc.
Intuit Inc. is a leading provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals. Its flagship products and services, including QuickBooks®, Quicken® and TurboTax®, simplify small business management and payroll processing, personal finance, and tax preparation and filing. ProSeries® and Lacerte® are Intuit's leading tax preparation offerings for professional accountants. Intuit Financial Services helps banks and credit unions grow by providing on-demand solutions and services that make it easier for consumers and businesses to manage their money.
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