Intuit Indexes Show Small Business Growth Slowing
US small business employment continued to grow slowly in September, while hours worked and compensation rose. Revenue in August declined for the sixth consecutive month.
These are among the results for the monthly Intuit Inc. Small Business Revenue and Employment indexes, which together provide a current picture of the economic health of the nation's small businesses.
The Small Business Revenue Index is based on data from QuickBooks Online and covers the period from January 2005 through August 31, 2012. It indicates that:
- August small business revenue fell by 0.4 percent from the previous month.
- Continuing July's trend, the retail industry, along with the accommodation and food services sector, saw the biggest declines at minus 0.7 percent respectively.
- The construction industry followed, with a decline of 0.6 percent.
The Small Business Employment Index is based on data from Intuit Online Payroll and covers the period from January 2007 through September 23, 2012. The index shows that:
- Employment rose by 0.2 percent in September, which is an annualized growth rate of 2.5 percent.
- That growth equates to approximately 40,000 new jobs created in September, although Intuit is recalibrating the employment index and expects these numbers to change.
- Average monthly compensation grew by 0.6 percent, or $17, an increase from the growth of $2 seen last month.
- Average monthly hours worked increased by 0.18 percent, or 12 minutes.
Small Business Revenue Index
Small businesses overall saw a decline in revenue in August. The health care and social assistance industries saw the smallest decline of all, at minus 0.3 percent, which is slightly less than the 0.4 percent decline seen in the previous month. The health care sector has, however, had the longest decline, starting in November 2011.
|Sector||August Change in Revenue|
|Accommodation, food services and drinking places||- 0.7%|
|Retail trade||- 0.7%|
|Professional, scientific and technical services||- 0.5%|
|Real estate and rental and leasing||- 0.5%|
|Other services||- 0.3%|
|Health care and social assistance||- 0.3%|
The Intuit Small Business Revenue Index is based on data from more than 100,000 small businesses, a subset of the total QuickBooks Online financial management user base.
Small Business Employment Index
Based on September's numbers and revised national employment data from the Bureau of Labor Statistics, Intuit revised upward the previously reported August growth rate to 0.2 percent from 0.16 percent. This equates to 50,000 jobs added in August, up from a previously reported 30,000 jobs, though these numbers are expected to change once the index is recalibrated.
Increase in Hours Worked, Increase in Compensation
Small business hourly employees worked an average of 107.2 hours in September, an increase of 0.18 percent, or about 12 minutes, from the revised figure of 107.0 hours in August, making for a 24.7-hour workweek.
Average monthly pay for all small business employees rose to $2,768 in September, an increase of 0.6 percent, or $17, from the August revised figure of $2,751 per month. The equivalent annual wages would be about $33,200 per year, which is part-time work for many small business employees.
Small Business Employment by Geography
The Employment Index showed growth in overall employment in September for all regions except for the West North Central and the Middle Atlantic divisions, which fell by 0.13 percent and 0.05 percent respectively. A state-by-state breakdown showed the largest employment increases in Washington and Michigan, a trend that continued from last month. New York and Oregon saw the largest decreases.
|U.S. Census Division||Percent Change in Employment|
|East North Central||+ 0.3%|
|West North Central||- 0.13%|
|Middle Atlantic||- 0.05%|
|New England||+ 0.12%|
|South Atlantic||+ 0.3%|
|East South Central||+ 0.14%|
|West South Central||+ 0.4%|
Small Business Employment by US Census Division continues to grow in most parts of the country. The data reflects employment from approximately 84,000 small business employers, a subset of small businesses that use Intuit Online Payroll. The month-to-month changes are seasonally adjusted and informative about the overall economy.
Small Business Employment increased for most states in which Intuit Online Payroll has more than 1,000 small business firms. The month-to-month changes are seasonally adjusted and informative about the overall economy.
|State||Change in Employment|
|New Jersey||+ 0.16%|
|New York||- 0.20%|
|North Carolina||+ 0.02%|
Source: October 1, 2012, Intuit Press Release
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