The hiring picture at small businesses improved slightly in April, according to the payroll giant Paychex.
The Paychex | IHS Small Business Jobs Index from Paychex and the research firm IHS increased 0.04 percent during the past month, bringing the national index to 100.82 in April. Year over year, however, the national index declined 0.43 percent.
“From a national perspective, it was basically fairly flat last month,” Paychex president and CEO Martin Mucci told Accounting Today in an interview Tuesday. “We had gone up the first couple of months of the year, and that’s remained pretty solid. Small business employment growth has been pretty positive the first part of 2015.”
The national index held steady in March and April, indicating small businesses are able to maintain the increased rate of employment growth seen by Paychex and IHS in January and February. While the West North Central region decreased slightly in April, it continued its hold on the top index spot among regions. Washington regained the lead among states tracked by the index, with Maryland showing the best one-month gain in April.
“We’re seeing housing come back in select markets across the country, particularly on the West Coast, Southwest and the Florida area,” said Mucci. “The strongest numbers are still in the central part of the U.S. We’re seeing a lot of energy jobs. From Texas to North Dakota, jobs have been up because of lower energy prices, more fracking and that type of thing. Then oil dropped, and I think that’s bounced Houston around a little bit. Houston had great small business job growth, and then it’s kind of dropped a little bit in the last few months as oil has dropped.”
Dallas, however, continued its reign as the top-ranked metropolitan area for the seventh month in a row, according to the index. With the second best one-month growth rate (0.56 percent), Dallas increased its lead as the top metro index. Ranked first for seven straight months, Dallas hit a new peak level in April of 104.32. Detroit is the second-ranked metro index and also reached a record high of 103.26. Houston’s hiring numbers crumbled with the Texas oil market as the metro’s index plummeted to 100.89, the slowest level of job growth since 2011.
At 102.57, the West North Central region remained the top-ranked regional index in April. Falling for the third straight month, New England holds the lowest regional index (99.61), despite first-quarter data from the U.S. Bureau of Labor Statistics indicating moderate overall job growth. The pace of job growth in the South Atlantic region has steadily risen since last fall and is now trending near a two year high.
At 103.04, Washington State regained its position as the top-ranked state index in April, after holding the position for seven months in 2014. In line with general employment losses reported by the BLS, the pace of job growth in Texas fell again in April, the first consecutive monthly drop since 2013. Rising to 100.27 and at a nine-year high, the Maryland index jumped 0.68 percent, the best one-month growth rate among states.
“Right now at least we’re certainly on a positive trend for the first part of the year,” said Mucci. “It hit its peak last April, and then came down a little bit through the fall, and then went back up in the first part of this year.”
Accountants are likely to get more clients in industries relating to housing and construction as the housing market rebounds.
“You’re seeing new housing starts bouncing around a little bit, but generally housing sales are back up,” said Mucci. “With interest rates low, I think that’s helping. I would expect accountants to be busier with anything around housing—roofers, contractors, landscapers and so forth.”
Paychex hasn’t seen a major change in wages among workers, with wages up just about 2 percent among its small business clients. But there are opportunities for accountants with servicing growing small businesses. “When you see small businesses growing and new businesses starting, I would think the accounting community would be busier and more in demand because of more regulations and complexities as new businesses start up,” said Mucci. “We certainly see that with all of the regulations around hiring and pay rates, immigration, who you’re hiring and are they registered, and so forth, and certainly the complexities of taxes and health care reform. All, I think, will keep the accounting community very busy.”
For more information on the report, click here.
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