As a small business owner, you probably already know that Intuit specializes in providing small and medium-sized businesses a variety of business solutions. You may be a QuickBooks user, one of the company’s most popular and enduring financial management suite of products.
But Intuit also compiles and maintains monthly Small Business Employment and Revenue Indexes to gauge how hiring, employment, and revenue might be rising or falling. Employment and revenue are seen to be key indicators of the overall health and activity of small businesses.
According to the results of the most recent indexes, small business employment in the U.S. increased 0.11 percent in January, or barely more than one-tenth of one percent. This represents 20,000 new jobs added and an annualized growth rate of 1.3 percent.
Although some growth is better than none, industry experts refer to the rate of small business employment as a ‘continuing slow climb’ that has followed a slight dip that lasted from April through September last year. But the number of small business jobs, which is 19.9 million-plus, is still below the April 2012 number—and unfortunately, well below the level reported in March 2007—21.2 million—before the recession hit.
Average monthly compensation fell by 0.2 percent in January, or $6, compared to an increase of $13 reported in December. The average monthly pay for small business employees fell to $2,676 in January. The equivalent annual wages would be about $32, 100 per year, which is part-time work for almost half of small business employees. Average monthly hours worked also decreased—by 0.9 percent, or almost one hour. Hourly employees working in small businesses clocked an average of 105.1 hours in January, as compared to 106.1 hours worked in December. The average work week for those employed by small businesses: 24.3 hours.
Among the 33 states tracked by Intuit’s Small Business Employment Index, just 11 showed employment increases; two remained flat; and nearly two-thirds (20) reported decreases. Utah and Nevada were the top two states in terms of employment increases, while small businesses in Michigan and Indiana saw the greatest employment declines. The Employment Index is based on aggregate data from 170,000 small business employers, a subset of users of two Intuit products, Intuit Online Payroll and QuickBooks Online Payroll.
At the same time, small business revenue overall was reported to have dropped 0.4 percent in December. Revenue has been declining since 2012. One explanation: A rise in self-employment and other new business within industry sectors, meaning that there are more companies competing with each other in the same markets for the same business.
Looking at the entire past year, only one industry—construction—saw increased revenue. That sector reported a 3.1 percent revenue increase, as compared with a decline of 1.8 percent over the year for small businesses as a whole. The largest decreases in revenue were reported in the retail (5 percent) and healthcare (3.8 percent) sectors.
The Revenue Index is based on aggregate data from approximately 100,000 small businesses, a subset of Intuit QuickBooks Online users.
What does it all mean? That recovery from the economic downturn of the past years continues to be long, slow and uneven, and that many, if not most, small businesses are not ‘booming.’ Also, the majority of small business sectors and employees are still struggling, despite some of the good news coming from Wall Street and other sources. And to top it off: One economist associated with the Intuit indexes pointed out that with employee payroll taxes returning to 6.2 percent (after a 2 percent respite), we may see small business employees cutting their spending because they’ll be taking home less money.
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