Intuit Small Business Indexes Show Mixed Signals
by Terri Eyden on
Small businesses in the United States are seeing weak employment and compensation growth, while hours worked and revenue rates decreased.
These are among the results of the monthly Intuit Inc. Small Business Revenue Index and Small Business Employment Index, which, together, provide a complete and current picture of the economic health of the nation's small businesses.
Small Business Revenue Index
The Revenue Index is based on anonymized, aggregated data from 150,000 small businesses, a subset of users who use Intuit's QuickBooks Online financial management offering. The index is based on data from QuickBooks Online from January 2005 through June 2012. Following are some of the findings:
- Small business revenue decreased by 0.5 percent from the previous month.
- Hospitality and food services sector saw the biggest decline at 0.7 percent, followed by the retail industry at 0.5 percent.
Small Business Employment Index
This index is based on anonymized, aggregated data from January 2007 through July 23, 2012, of 82,000 small business employers, a subset of users who use Intuit Online Payroll. Following is a summary of the results:
- Employment increased by 0.17 percent in July, an annualized growth rate of 2.1 percent.
- Approximately 35,000 new jobs were created.
- Average monthly compensation ($2,724) grew by 0.3 percent, or $7.
- Average monthly hours worked (106.3) decreased by 0.3 percent, or 24 minutes.
- Growth was seen in overall employment in July for all regions except for the West North Central division, which decreased by 0.10 percent, and the Middle Atlantic, which remained flat.
- A state-by-state breakdown showed increases in all states that the index covers, with the exception of Pennsylvania, New York and New Jersey, which showed declines. Michigan recorded the highest growth at 0.7 percent.
- 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.
"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 percent of employment among all companies, it accounts for roughly 20 percent of employment for small companies, so any change in this sector is important."
You can access additional data on the Intuit website.
Source: Intuit Inc.