Small business revenue and employment are slowly growing but more growth is needed to reach prerecession levels, according to the monthly Intuit Inc. Small Business Employment and Revenue Indexes.
The Small Business Revenue Index shows that revenue has been growing slowly and is starting to gradually approach 2007 pre-recession levels, with an upturn in revenue for certain industries, a flat level for others and no decline for any.
The index is based on data from QuickBooks Online and covers the period from January 2005 through April 2012.
The Small Business Employment Index shows that nationwide employment expanded slowly growing by 0.2 percent in May, for an annualized rate of 2.5 percent. Employment in Washington grew at 0.4 percent in May.
The index is based on data from Intuit Online Payroll and covers the period from January 2007 through May 23, 2012.
“The employment and revenue indexes tell a consistent story,” said Susan Woodward, the economist who worked with Intuit to create the Intuit Small Business Indexes. “Both indicate there is a recovery under way. We need growth at this level for two more years for small business employment to return to the level we saw in early 2007.”
In April, retail, professional services and other services saw upticks in revenue, with small improvements in the construction and real estate industries. Small businesses in the accommodation and food service industry, along with the health care and social services sector, saw flat revenue levels.
“The industry breakouts of the revenue indexes help us understand why the recovery is slow – construction is still far below normal,” Woodward said. “We know from other federal data as well that construction is still very depressed. Single-family construction is running about 600,000 units per year, compared to 1.5 million units per year in normal times.”
Small business employment increased by 0.2 percent in May, which equates to about 40,000 jobs created, though Intuit is recalibrating the index and expects these numbers to change.
Based on May’s numbers and revised national employment data from the Bureau of Labor Statistics, Intuit revised upward the previously reported April growth rate to 0.3 percent. This equates to 60,000 jobs added in April, up from a previously reported 40,000 jobs, though these numbers are expected to change once the index is recalibrated.
Small business hourly employees worked an average of 106.4 hours in May, a decrease of 0.6 percent, or around 42 minutes, from the revised figure of 107.1 hours in April, making for a 24.6-hour workweek.
Average monthly pay for all small business employees decreased to $2,688 in May, a decrease of 0.13 percent, or $4, from the April revised figure of $2,692 per month. The equivalent annual wages would be about $32,300 per year, which is part-time work for many small business employees.