Compensation, Hours Worked Increase; Small Business Revenue Continues to Decline
MOUNTAIN VIEW, Calif. – Apr. 01, 2014 –
U.S. small business employment remained flat in March for the second consecutive month, while average hours worked and monthly wages both increased significantly. Overall, small business revenue declined 0.15 percent in February.
"Small businesses are continuing to hire, but the rate of new hires remains low – close to the level it fell to in June 2009," said Susan Woodward, the economist who works with Intuit to create the indexes. "However, the number of employees leaving jobs or being laid off offsets the rate of hiring. Thus, employment levels remained flat for the second consecutive month. Employment losses in March were concentrated in states suffering from the cold weather, especially in the upper Midwest and Mountain States. The silver lining is that nationally, small business employers are giving more hours to their existing employees, an increase of 0.2 percent from the previous month. This is the highest it's been since January 2013.
"Over the last year, small business revenue has grown by 2.3 percent on a per-business basis, which is faster than the national rate of inflation. Revenue for all industry sectors has grown, with the exception of real estate services."
The Intuit Small Business Employment Index shows a no increase in employment in March. The Employment Index reflects data from approximately 220,000 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.
Increase in Hours Worked, Compensation
Hourly small business employees worked an average of 108.8 hours in March, which translates to an 18-minute increase from February's figure of 108.5 hours, making for a 25-hour work week.
Small Business Employee Monthly Hours Worked for hourly employees increased by 0.2 percent in March. The levels reflect data from approximately 600,000 hourly employees of the Intuit Online Payroll and QuickBooks Online Payroll customer set of approximately 220,000 small businesses and is not necessarily representative of all small businesses. The month-to-month changes are seasonally adjusted and informative of the overall economy.
Average monthly pay for small business employees also grew significantly, rising $9 to $2,747 in March, which is a 4.4 percent gain on an annualized basis. The equivalent yearly wages would be about $33,000. This total includes wages that small business owners pay to themselves.
Small Business Employee Monthly Compensation for all employees increased by 0.4 percent in March. This data includes the compensation paid by small business owners to themselves. The levels reflect data from approximately one million employees of the Intuit Online Payroll and QuickBooks Online Payroll customer set of 220,000 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.
Weather Affects Regional Employment Growth
Small business employment increased in 23 of the 39 states tracked by Intuit's Small Business Employment Index. Kentucky continued to show the strongest state employment growth, at 0.3 percent. Fourteen states showed employment declines, while two remained flat. Missouri and Idaho recorded the largest declines for the second consecutive month, at 0.4 and 0.3 percent respectively.
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.
Small Business Revenue Declines Continue
The February Revenue Index showed overall small business revenue decreased 0.15 percent on a per-business basis. Only the businesses in the construction and "other services" categories of Intuit's index registered revenue gains, while the majority reported declines. The "other services" category includes non-professional services, such as auto repair and gardening services.
The real estate services industry showed the largest revenue decline at 0.8 percent, followed by the accommodation and food services sector, which dropped 0.2 percent.
"We shouldn't view the revenue decline of the past six months as a collapse," Woodward said. "The decline has only been about 0.5 percent, which equates to approximately 1 percent on an annualized basis."
This index is based on data from QuickBooks Online, covering the period from Feb. 1-28.
The Intuit Small Business Revenue Index is based on data from more than 150,000 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 approximately 200,000 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 150,000 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.