U.S. small businesses are seeing weak employment and compensation growth, while hours worked and revenue rates decreased.
These are among the results for the monthly Intuit Inc. Small Business Employment and Revenue Indexes, which together provide a complete and current picture of the economic health of the nation’s small businesses.
The Small Business Employment Index shows that employment increased by 0.17% in July, for an annualized growth rate of 2.1%. This equates to approximately 35,000 new jobs created, although Intuit is recalibrating the index and expects these numbers to change.
Average monthly compensation grew by 0.3%, or $7, while average monthly hours worked decreased by 0.3%, or 24 minutes. The index is based on data from Intuit Online Payroll and covers the period from January 2007 through July 23, 2012.
The Small Business Revenue Index indicates that small business revenue decreased by 0.5% from the previous month. The accommodation and food services sector saw the biggest decline at 0.7%, followed by the retail industry at 0.5%. The index is based on data from QuickBooks Online and covers the period from January 2005 through June 2012.
“This month’s indexes indicate a mixed bag for small businesses,” said Susan Woodward, the economist who worked with Intuit to create the indexes. “Revenues have been declining for two months now, so the weak employment growth rate for July is not a surprise.
“The silver lining is the construction industry, which saw an increase in revenue in May and the smallest decline in June. While construction accounts for about 8% of employment among all companies, it accounts for roughly 20% of employment for small companies, so any change in this sector is important.”
Small Business Revenue Index
Small businesses overall saw declines in revenue in June. The construction industry and health care and social assistance sectors saw the smallest declines, at 0.01 and 0.04%, respectively.