Growth of Small Businesses Slows
The growth of small business hiring has slowed down according to Paychex IHS Small Business Job Index, which dropped 0.11% from July to August. This is the third consecutive monthly decline in four months. The index, by Paychex Inc. and IHS Inc., reviews employee numbers at 350,000 small businesses - accounting for almost 95% of U.S. employers, each with less than 50 employees - in the U.S. with 2004 as its base year. It is an analysis of small business employment trends in the U.S which launched in April 2014.
PayChex, Inc. offers payroll, human resources, and benefits outsourcing solutions for small and medium-sized businesses while IHS, Inc. is a global critical information and insight source.
“Although the Paychex IHS Small Business Jobs Index continues to show positive year-over-year growth, the short-term trend has declined 0.16% in the past three months,” said James Diffley, IHS Chief Regional Economist. The 0.08% decrease in June was followed by a 0.03% in July and 0.11% decrease in August. He added that the index was highest in April 2014.
The PayChex job data report showed changes over the last 12-month period. The Pacific and New England regions were the only two of nine regions to experience declines. Regional employment decreased by 0.63% in the Pacific and 0.32% in New England. The Mountain region has shown the best growth rate from month to month and is now at the top of the regional index. The Mountain, East South Central, and West North Central areas saw the most growth at 1.66%, 1.25% and 0.90% respectively. The other regions had 0.08% to 0.44% growth.
Wisconsin had the highest increase – 0.39% – from July to August and 1.7% from year to year. The cities in Texas have led in total job growth in 2014. Dallas has been at the top of the index for three consecutive months and was at 103.8% in August.
Paychex president and CEO Martin Mucci noted, “The index continues to show positive growth, and long-term gains.” He added, “However, that growth has slowed in the last several months.”
The Small Business Jobs Index is a useful tool for the analysis of changes in worker numbers from month to month, and year to year. Revisions to the index are not expected as payroll data is used to create the index.