Small business employment growth dipped for the third month in a row, according to the payroll service provider Paychex.
The Paychex | IHS Small Business Jobs Index, which Paychex compiles with the research firm IHS Markit, declined 0.02 percent in November to 100.38. Overall, small business employment growth levels stayed consistent with the same period a year ago.
“The overall index is down slightly from October,” Paychex president and CEO Martin Mucci said Tuesday. “It still shows job growth but it has flattened to what it was last year.”
The East South Central region of the U.S. showed the strongest growth, up 3.42 percent from last year. Georgia overtook Washington as the top-ranked state for small business employment growth. Seattle maintained its position as the top metropolitan area of the country in November, with Atlanta following closely in second place.
“The interesting thing is the tale of two coasts,” said Mucci. “The East Coast, particularly the Southeast, continues to be strong. The leaders from a small business growth standpoint are the Southeast regions and the states of Florida, Georgia, North Carolina and Tennessee.”
Small business job growth for leisure and hospitality increased 0.20 percent from October, while construction jobs declined 0.17 percent. Energy jobs also fell. The Other Services category, which includes discretionary services such as pet care and personal care, remained robust.
“In the Central part of the country, particularly in Texas, we have a big drop-off from last year as oil prices and the lack of fracking have really hurt places like Houston,” said Mucci. “Even Dallas is down pretty strongly from last year. There are not a lot of changes in the job types and industries. Other Services is still strong, far outpacing the other sectors, with growth rate up about 0.4 percent from last year, and 4 percent from our base year, so Other Services, or discretionary services, is still doing the best. Much of that can be part-time employment, which we’re seeing up pretty substantially over the last three years.”
The recent election is sure to have an impact on small business jobs. “It will be interesting over the next few months to watch the index and see how small businesses react after the election to the changes, what we hope will be less regulation and possibly lower taxes on their businesses,” said Mucci. “We hope that will drive more jobs.”
The Conference Board reported Tuesday that the Consumer Confidence Index hit 107.1, the highest level since 2007. “That’s the biggest jump we’ve seen in a long time in consumer confidence,” said Mucci. “Hopefully that equates to more buying and more jobs.”
Small businesses will need to rely on their accountants to keep an eye on future changes with regulations, such as the injunction last week by a federal judge on the Labor Department’s plan to expand overtime pay to millions more workers. Before the overtime rule could take effect on December 1, the injunction stopped it. Accountants and their small business clients will also need to monitor future developments with the Affordable Care Act, which President-elect Donald Trump has vowed to repeal.
“The good thing with all these changes for accountants and their clients is that it’s probably more dramatic than we expected before the election,” said Mucci. “Hopefully we’ll see less regulation, but it will be very important for clients to stay tuned to their accountants, who will be close to all of the changes in filing requirements and tax rates that could have a big impact on their businesses from a profitability standpoint.”