SOURCE: Paychex, Inc.

Paychex, Inc.

July 05, 2016 08:30 ET

Paychex | IHS Small Business Jobs Index Indicates Employment Growth Rebound

ROCHESTER, NY--(Marketwired - July 05, 2016) -

  • Small business job growth increases 0.21 percent in June, reversing May's decline
  • South Atlantic claims top spot among regions, hitting record-level growth
  • Washington remains top-ranked state for sixth consecutive month
  • Seattle continues as top metro
  • Construction industry has strongest gain in more than three years

The Paychex | IHS Small Business Jobs Index rebounded 0.21 percent in June, increasing to 100.81, reversing the May decline of 0.18 percent. The second quarter of 2016 saw an overall gain of 0.07 percent, despite significant movement in the index month-to-month. The change in the pace of small business employment growth from May to June was the largest the national index has seen since June 2013. With a strong one-month growth rate, the South Atlantic hit a record level in June at 101.96 to claim the top spot among regions. Washington increased its lead among states, gaining 0.13 percent from May to June to bring its index level to 104.50. At 104.96, Seattle was essentially unchanged and remains the top-ranked metro index. Up 0.52 percent this month, Construction had its strongest gain in more than three years, the largest increase among all industries in June.

"The Paychex | IHS Small Business Jobs Index rebounded 0.21 percent in June, reversing May's decline of 0.18 percent. At 100.81, the index improved to its strongest level of 2016 and close to one percent higher than the 2004 base year," said James Diffley, chief regional economist at IHS.

"While we've seen a lot of movement in the index over the past couple of months, I think it's important to focus on the long-term trend: sustained, moderate growth. The index is now up 0.44 percent through the first half of 2016, which is certainly a positive," said Martin Mucci, president and CEO of Paychex.

National Index
Increasing 0.21 percent in June, the national index recovered all of its May losses and improved to its best level of 2016, 100.81. The national index improved again in the second quarter, following a strong 0.37 percent first quarter increase. The index is now up 0.44 percent through the first half of 2016. After trending flat or negative for the past 18 months, the national index is up year-over-year, 0.18 percent. Reversing the trend from May, eight of the nine regions and seven of the eight industries analyzed improved in June.

Regional Employment
With a strong one-month growth rate, the South Atlantic hit a record level in June at 101.96 to claim the top spot among regions. At 101.79, East South Central fell to second place among regions, despite gaining 0.06 percent from the previous month. New England improved 0.27 percent from May, but closed the second quarter down -0.19 percent. The Middle Atlantic improved to 100.59 with the strongest one-month growth rate, up 0.32 percent. At 99.94, the West South Central index remained below 100 after falling below 100 in May for the first time in six years. In fact, both West Central regions are below 100 and down more than one percent from last year.

State Employment Trend
Washington increased its lead among states, gaining 0.13 percent from May to June to bring its index level to 104.50. With Florida, Georgia, Virginia, and North Carolina following Washington, the next four states in the top five are all located in the South Atlantic. Virginia increased 0.79 percent in June, with an index now at 102.46, an eleven-year high. Neighboring Maryland also had a strong month, gaining 0.89 percent to bring its index back over 100 for the time in a year. At 101.24, New Jersey is up 0.24 percent from May to June and 2.38 percent from the previous year, the best 12-month growth rate among states. With a sizable increase in Houston and an increase in Dallas, Texas, at 101.36, recovered slightly in June after hitting a five-year low in May.

Note: Analysis is provided for the 20 largest states based on U.S. population.

Metropolitan Employment Trend
At 104.96, Seattle was essentially unchanged and remains the top-ranked metro index. The Washington D.C. metro was up 0.51 percent from May to June, its ninth straight monthly increase. Similarly, the BLS reports large job gains this spring for the Washington D.C. metro area. At 102.58, Atlanta slipped 0.33 percent from the previous month, yet remains up 0.95 percent during the past quarter with significant increases in April and May. Baltimore gained 1.19 percent from May to June as its index climbed back over 100 for the first time in a year. Increasing to 101.09, Minneapolis is up 2.69 percent through the first half of 2016. With the best 12-month growth rate, 1.80 percent, the New York City metro had its eighth consecutive increase in June.

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Industry Employment Trend
Up 0.52 percent this month, Construction had its strongest gain in more than three years, best among all industries in June. Improving the pace of small business job growth for the fifth month in 2016, Other Services (except Public Administration) continues to lead among industry sectors with an index level of 105.32. Manufacturing slowed for the fifth consecutive month as its index decreased to 98.66 in June, marking a new five-year low. Among industries, Manufacturing also had the lowest one-month growth rate and 12-month growth rate at -0.16 percent and -0.90 percent, respectively. Leisure and Hospitality had a solid 0.35 percent gain in June, bringing its index to 100.74, in line with June 2015.

Note: Analysis is provided for eight major industry sectors.

For more information about the Paychex | IHS Small Business Jobs Index, visit the index website. Plus, view and download the June 2016 Paychex | IHS Small Business Jobs Index infographic. Or, sign up to receive monthly alerts on the Paychex | IHS Small Business Jobs Index.

*Information regarding the professions included in the industry data can be found at the Bureau of Labor Statistics website.

About the Paychex | IHS Small Business Jobs Index
The Paychex | IHS Small Business Jobs Index is released each month by Paychex, Inc., a leading provider of payroll, human resource, insurance, and benefits outsourcing solutions for small-to medium-sized businesses, and IHS, Inc., a leading global source of critical information and insight, providing analysis of small business employment trends across the U.S.

The index analyzes same-store, year-over-year worker count changes to identify and track small business employment trends using real small business payroll data from the Paychex client base. The index is based on aggregated data from approximately 350,000 small businesses with fewer than 50 workers across the United States, one of the largest sample sizes of any small business index or report in the country, and provides timely, accurate insight into national, regional, state, metro, and industry employment activity.

About Paychex
Paychex, Inc. (NASDAQ: PAYX) is a leading provider of integrated human capital management solutions for payroll, HR, retirement, and insurance services. By combining its innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers small- and medium-sized business owners to focus on the growth and management of their business. Backed by 45 years of industry expertise, Paychex serves approximately 605,000 payroll clients across more than 100 locations and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting www.paychex.com, and stay connected on Twitter and LinkedIn.

About IHS (www.ihs.com)
IHS (NYSE: IHS) is the leading source of insight, analytics and expertise in critical areas that shape today's business landscape. Businesses and governments in more than 140 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs nearly 9,000 people in 33 countries around the world.

IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. Copyright © 2016 IHS Inc. All rights reserved.

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