The SBEI increased by 1.34 percent in May, following an increase of .05 percent in April. This gain reflects a bounce in growth in employment and contrasts a weak report on private sector job growth from ADP that added 133,000 private sector jobs last month, which was below analysts’ estimates.
Of the companies surveyed in May, the data shows:
- 26 percent reported an increase in employee headcount
- 20 percent reported a decrease in staffing
- 54 percent of the companies involved in the survey maintained their number of employees
Today’s small business owner is still cautious, but surprisingly, has shown budding confidence in regards to sales, per other indicators. Should a sales improvement trend continue, then we could see traction and positive signs during the seasonal hiring that takes place during the summer.
Continued deterioration in economic conditions abroad can still closely impact domestic economic prospects and its affect on small business hiring.
What’s more, with declining oil prices, employers will recognize some lower costs that will translate to more investable capital. That said, fuel prices are quite unstable, so unless the decline is sustainable, it's likely to lead to greater net incomes rather than longer term investment in labor.
In conclusion, the small business sector of the economy continues to attract headline coverage as our leadership, political, and economic pundits stress that the small business owner is the driving force of the economy. The SBEI is focused on this portion of our economy and is a critical component to understanding domestic economic trends.