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Small Business Employment Growth Is on the Rise
March 7, 2017 | IHS MarkitEstimated reading time: 4 minutes
The Paychex | IHS Small Business Jobs Index continued to increase in February, rising to 100.78, up 0.16% from the previous month and 0.39% for the quarter. Not only has the national index increased for three consecutive months, but the rate of growth has increased each month as well. The national index, however, is approximately flat to February 2016, up just 0.03%.
East South Central continues to lead small business growth among regions, improving its pace 1.83% year-over-year, followed by South Atlantic. Tennessee once again leads all states. Top-ranked for the third consecutive month at 103.85, Atlanta spiked 0.93%, its best one-month gain in nearly three years. Financial Activities jumped 0.53$ in February, the best one-month gain among the industry sectors.
“Since November, small business job conditions have shown broad-based improvement as all industries and regions have positive three-month growth rates,” said James Diffley, chief regional economist at IHS Markit.
“After three months of continued small business employment growth, it appears that business optimism following the election is now translating to jobs,” said Martin Mucci, Paychex president and CEO.
National Index
Month-to-month changes for the national index have been trending in a positive direction for the past six months, since September. The national index improved 0.39$ from December to February, the best quarter since early 2014. Currently at 100.78, the national index is signaling positive employment growth, 0.03% faster this year versus last.
Regional Employment
At 103.41, East South Central continues to lead small business growth among regions, improving its pace 1.83% year over year. In contrast, neighboring West South Central is the only region below 100 and is down 1.51% from last February. Ranked second among regions, the South Atlantic increased 0.37 percent in February to 102.17, its strongest one-month gain in more than four years. East North Central had the best one-month growth, 0.58% , aided by strong movement in the Trade, Transportation, and Utilities industry. Dropping to 100.19, Pacific fell for the seventh time in the past eight months as its index is ranked second to last for the first time since February 2012.
State Employment Trend
Eighteen of 20 states now rank above the national baseline, with only California and Illinois below 100. Ranked second behind Tennessee, Georgia spiked 0.93% from the previous month to 103.63. With the strongest 12-month growth rate and the second best one-month growth rate, Virginia is ranked third at 102.78. Florida and Washington round out the top five, with index levels above 102. At 102.25, and ranked third among states in October, North Carolina has dropped 10 spots, decreasing 1.74% during the last four months.
Metropolitan Employment Trend
Top-ranked for the third consecutive month at 103.85, Atlanta had a significant 0.93% increase in February, its best one-month gain in nearly three years. At 102.28, small business job growth in Washington is at its strongest level since 2005. Ranked 19th last February, Washington improved 2.52 percent during the past 12 months, climbing to third place among metros. After peaking in October at 105.39, Seattle has dropped 3.24% to 102.08 and has fallen out of the top three metro areas for the first time in more than three years. Riverside, CA fell 0.74% in February, worst among metros, as its index slipped back below the national baseline.
Industry Employment Trend
Financial Activities jumped 0.53% in February. With the increase, Financial Activities has a positive three-month growth rate for the first time in 18 months. Up to 101.46, Leisure and Hospitality gained 0.44% from the previous month and has the strongest year-over-year growth rate among industries as well. Construction was the only industry to decline in February, down 0.17% to 100.95. Construction as a whole has declined1.50 percent during the past 12 months, but in the South, Construction ranks as one of the strongest industries.
About the Paychex | IHS Small Business Jobs Index
The Paychex | IHS Small Business Jobs Index is released each month by Paychex, Inc., a leading provider of payroll, human resource, insurance, and benefits outsourcing solutions for small-to medium-sized businesses, and IHS Markit, a world leader in critical information, analytics and expertise, providing analysis of small business employment trends across the U.S. The index analyzes same-store, year-over-year worker count changes to identify and track small business employment trends using real small business payroll data from the Paychex client base. The index is based on aggregated data from approximately 350,000 small businesses with fewer than 50 workers across the United States, one of the largest sample sizes of any small business index or report in the country, and provides timely, accurate insight into national, regional, state, metro, and industry employment activity.
About Paychex
Paychex, Inc. is a leading provider of integrated human capital management solutions for payroll, HR, retirement, and insurance services. By combining its innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers small- and medium-sized business owners to focus on the growth and management of their business. Backed by 45 years of industry expertise, Paychex serves approximately 605,000 payroll clients across more than 100 locations and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting www.paychex.com, and stay connected on Twitter and LinkedIn.
About IHS Markit (www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and expertise for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.
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