Small biz employment grows while revenue drops
By Amanda McGrory-Dixon
Although small-business employees worked more hours, compensation rose and employers added 30,000 jobs in November, revenue dipped 0.3 percent in October for the eighth straight month, according to the Small Business Employment and Revenue Indexes by Intuit Inc.
The study finds that employment grew by 0.14 percent in November for an annualized growth rate of 1.7 percent while average monthly compensation increased by 0.5 percent to $14, and average monthly hours worked rose by 0.11 percent to six minutes.
“The results are definitely mixed for small businesses,” says Susan Woodward, the economist who worked with Intuit to create the indexes. “We began seeing some employment gains in April 2010, but between March and September 2012, the numbers began to drop again. The good news is they are back up for October and November.”
On average, small-business hourly employees worked 110.1 hours in November for a minor gain from the revised figure of 110 hours in October, the study finds. This totals to a 25.4-hour workweek. Small-business employees also saw higher monthly pay as it increased 0.5 percent to $2,861 from $2,847. Based on this figure, the equivalent annual wages would come to approximately $34,300 per year.
According to the October Small Business Revenue Index, there was a 0.3 percent decline drop from the previous month with the real estate and health care industries experiencing the largest dips at biggest at minus 0.9 and minus 0.7 percent respectively. Professional services had the third largest drop at minus 0.6 percent.
“The decline in small-business revenue is disheartening and appears to be happening despite a rise in single-family construction and existing home sales,” Woodward says. “There has also been a 4.4 percent increase in the number of people who are self-employed since November 2011. That brings new entrants to compete with incumbents and may explain the steady decrease in revenue per small business.”
Originally published on BenefitsPro.com