After a promising start to 2018, there’s been drops in both new small business jobs and wage growth in February, according to a recent report by business services supplier Paychex and businesses analytics provider IHS Markit.
February 2018 Small Business Employment Statistics
The Paychex | IHS Markit Small Business Employment Watch for February reveals the job market at small businesses is tightening. There are fewer new jobs, wages are going down slightly and the amount of hours worked per job are going up.
This index uses a baseline figure of 100. If the index is above, it shows job growth. However, in February, the Small Business Jobs Index is 99.77. This represents a one percent drop from last year at this time and a 0.11 percent decline from January 2018. This month marks the eighth in a row where the national index has been below 100.
The 12-month hourly earnings growth metric fell too. It was 2.74 percent in January and stood at 2.67 percent in February. Wages averaged out nationally at $26.41 per hour.
However, weekly hours have been steadily climbing year over year for 15 months.
The numbers can be at least partially explained in the ongoing search for qualified employees.
“The results of the Small Business Jobs Index over the past year are evidence of the tightening labor market,” said Martin Mucci, Paychex president and CEO in a company release. “As the growth in jobs stabilizes because of challenges in finding qualified employees, we expect to see business owners making positive changes to wages and benefits.”
The regional jobs breakdown has the South in first place with an index of 100.34, the only region with an index over 100. The West leads in wage growth among regions averaging $27.52 per hour.
Washington was tops for state small business employment growth and Arizona was the leader for state hourly earnings growth. Seattle bumped Denver as the number one metro when it came to small business employment growth with a one month growth rate of 0.88 percent.
For earnings growth, Western metros outshone the rest of America by a fair margin.
When it comes to industries, construction is enjoying steady employment growth with an index of 100.38 in the last quarter and has been on the upswing for the last six years. Leisure and hospitality enjoyed the best hourly earnings growth with a 3.79 percent year over year gain.
The Paychex | IHS Markit Small Business Employment Watch is released monthly. It derives data from approximately 350,000 Paychex clients.
Paychex is a provider of HR, payroll, retirement and insurance services for business while IHS Market provides information, analytics and solutions for industries worldwide.
Image: Paychex