Intuit Sees Small Business Compensation and Revenues Dropping

Small business employment in the U.S. increased in April, according to figures from Intuit, while average compensation and the hours worked decreased.

Small business revenues meanwhile continued to drop in March, while the construction industry continued to be the sole sector to see an increase.

Intuit’s Small Business Employment and Revenue Indexes report found that employment rose by 0.11 percent in April, adding 20,000 new jobs, for an annualized growth rate of 0.9 percent. Average monthly compensation fell by 0.4 percent in April, or $9, compared to the increase of $12 reported in March. Average monthly hours worked decreased by 0.8 percent, or 48 minutes, compared to the increase of 18 minutes reported in March. The employment index is based on data from Intuit Online Payroll and QuickBooks Online Payroll, covering the period from March 24 through April 23.

“Small business employment continued its tepid growth trend in April, and geographic differences continue to be dramatic,” said Susan Woodward, the economist who worked with Intuit to create the indexes. “Though Utah leads the pack in April’s employment gains, the West South Central census division, dominated by Texas, has been leading the recovery overall, reaching nearly the same level of employment as in mid-2008. Texas’ unusual mortgage law, which limited refinancing, may have spared the state from the worst of the defaults and the consequent decline in house values.”

Small business hourly employees worked an average of 104.9 hours in April, down 0.8 percent from the revised figure of 105.7 hours in March, making for a 24-hour work week. Hours worked have been falling since mid-2011, and are currently below their 2009 level.

Average monthly pay for small business employees fell to $2,676 in April, down 0.4 percent from the March revised figure of $2,685 per month. The equivalent yearly wages would be about $32,100 per year, which is part-time work for almost two-thirds of small business employees in Intuit’s data.

A state-by-state breakdown of employment growth showed that most states saw increases in April. Among the 36 states tracked by Intuit’s Small Business Employment Index, employment rose in 31, remained flat in two and declined in three. Utah, Idaho and Michigan saw the largest increases in April. New Mexico, Arkansas and Louisiana showed the greatest declines, though the declines were almost flat, at 0.01 percent each.

Small business employment results were mixed for the states in which Intuit Online Payroll and QuickBooks Online Payroll has more than 1,000 small business firms. The month-to-month changes are seasonally adjusted and informative about the overall economy.

The March Small Business Revenue Index showed a 0.4 percent overall revenue decline on a per business basis.

“Construction was the only industry to see revenues rise in March,” said Woodward. “Over the past year, the sector has seen two percent growth on a revenue-per-business basis. Across all industries, revenues per business were 0.2 percent below where they were a year ago.”

The real estate and professional services industries saw the greatest revenue declines in March, at 1.2 percent and 0.9 percent respectively. Revenue in the “other services” sector declined the least in March, at 0.09 percent, followed by health care at 0.3 percent. This index is based on data from QuickBooks Online, covering the period from March 1-31.