Small business hiring is up, doubling over the last six months, while wages and hours worked are down slightly, according to a new study.
Intuit’s Small Business Employment and Revenue Indexes looked at trends in revenue, hiring and compensation and found that 15,000 new jobs were added in July alone, bringing the amount of new jobs to 90,000 over the last six months. Since small businesses recovery began three years ago growth has been slow but steady, with 610,000 jobs being added. This is still 870,000 jobs below the peak levels seen in 2007.
While hiring is up with small business, the number of hours employees worked was down by 0.3% (18 minutes), averaging a 24.7-hour work week. With that slight decrease came a dip in wages as well, going down by 0.2%, down $6 from last month, with employees earning an average of $2,708 in July. For the first, time hourly wages rose to $16.
While this month’s increases in job creation are a sign of improvement for small businesses, their recovery lags behind the overall economy. “Even if small business adds 15,000 jobs a month for a year, small business employment would grow by slightly less than one percent. The job growth for the economy overall for the past year was 1.8 percent,” according to Intuit.
When it comes to economic recovery the weak link is construction. Overall it accounts for 5% of the total economy, but it’s even more critical for small business because in this sector it accounts for 20%. An average of 950,000 new single-family homes have been started per year, but last month that number dropped to 893,000, down by 92,000 units.
The State of the Union
While the increase in small business in a state-by-state breakdown shows that growth is not across the board, of the 40 states that intuit tracks, 29 experienced an upswing, while 11 saw a downturn. Idaho and Utah had the biggest increase (0.4%), while Michigan experienced the biggest decline (-0.5%). for the third month in a row.
Intuit specializes in creating business and financial software and systems. The Intuit Small Business Indexes is released monthly, and based upon data acquired through QuickBooks Online, Intuit Online Payroll and QuickBooks Online Payroll.