CBIZ Small Business Employment Index falls slightly in July

Our July Small Business Employment Index (SBEI) has recently been released and the findings show a slight drop in employment for small businesses. The July SBEI decreased by 1.57 percent, following an increase of 1.38 percent in small business hiring in June. The negative number is similar to the previous two years in which the SBEI metric has moved negative in the month of July. However, this year’s data has moved more negatively than in the previous two years.

The SBEI’s decrease illustrates a slight slowdown in small business hiring as compared to reports from the private sector that the job market was holding up. ADP’s July jobs survey reported the private sector added 163,000 jobs last month, which surpassed analysts’ estimates of 120,000. Additionally, June’s revised tally of 176,000 jobs added also exceeded analysts’ estimates.
A breakdown of key metrics from the small businesses surveyed in July include:

Click graph for a larger image of SBEI results

• 22 percent reported an increase in employee headcount
• 29 percent decreased staffing
• 49 percent maintained their number of employees

As the presidential election heats up, the nation's unemployment rate will certainly be one of the most discussed economic indicators. Should the jobless rate remain unchanged at 8.2 percent, the small business sector could suffer further losses ahead. Coupled with rising costs of doing business, the sector faces uncertainty.

In addition, owners of businesses with less than 300 total employees are still focused on, and concerned with, anticipated sales, taxes and regulation. It is possible that if the entrepreneurs we work with were able to better predict the changes to the latter two items, via action by Congress, they may be willing to invest in additional labor. Predictability is extremely important for the small business owner, who after three years of slow economic activity, is operating with few resources.

Additional information on these findings can be found in July's Small Business Employment Index press release.

The SBEI illustration is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.