ROCHESTER, NY--(Marketwired - November 01, 2016) -
- At 100.41, the national index is up 0.06 percent from last year, well above the baseline of 100 and representing continued small business employment growth
- The Southeast leads regional growth
- Washington remains top state by a wide margin; Texas down significantly
- Seattle continues to lead metros, followed by Atlanta
- Small business employment growth in Construction declines for fourth consecutive month
The Paychex | IHS Small Business Jobs Index declined in October, down 0.11 percent from the previous month to 100.41. September and October marked the first consecutive declines in 2016, as the national index is down 0.27 percent for the quarter. Despite this, the national index remains 0.06 percent above last year. The South Atlantic and East South Central lead regions with the fastest and strongest job growth. Washington continues as the top-ranked state index, up 1.50 percent from last year. Texas fell eight spots in October and now ranks 18th among states, with its index below 100 for the first time since 2010. Seattle maintains its large lead among metro areas with an index of 104.68, with Atlanta a strong second at 102.81. Though it remains well above 100 and third among industries, small business employment growth in Construction fell in October for the fourth consecutive month.
"The Paychex | IHS Small Business Jobs Index remains 0.06 percent above the level of growth from a year ago, though the national index has declined to its lowest point of 2016," said James Diffley, chief regional economist at IHS Markit.
"Uncertainty about what the future may bring is always a factor during a presidential election, and the most recent two months indicate that the election is likely one factor contributing to a slowing of small business employment growth," said Martin Mucci, Paychex president and CEO.
At 100.41, the Paychex | IHS Small Business Jobs Index is 0.06 percent above October 2015's index level of 100.34. After peaking for the year in June, the second half of 2016 has seen the national index fall 0.40 percent, mirroring the third quarter slowdown in total employment reported by BLS. Small business job growth has slowed in every region except the South Atlantic since June.
The South Atlantic and East South Central are experiencing the fastest and strongest small business job growth, as construction and migration return to levels last seen in the previous decade. The West Central regions, however, have the slowest and weakest small business job growth, resulting from the energy industry decline. In 2015, the Middle Atlantic region was below 100 each month of the year and ranked last (ninth) all but one time; in contrast, the Middle Atlantic's index has consistently been over 100 in 2016, and has moved up to the fifth position in the rankings for the past six months. Dropping 0.69 percent from September to October, Mountain fell to third among regions, but remains in solid growth territory at 100.98.
State Employment Trend
At 104.27, Washington leads small business growth among states by a wide margin, and has increased the pace of employment 1.50 percent during the last year. Following Washington are four South Atlantic states, Georgia, North Carolina, Virginia, and Florida, where small business job growth is increasing more than two percentage points faster than the national baseline. With an index level below 99 in October 2015, Virginia has increased 3.27 percent in the past year to 102.22. Florida's index has averaged 102.22 throughout 2016, and ranks as fastest-growing state for overall employment in the last quarter, according to the BLS. Texas is down eight spots and now ranks 18th among metros, with its index below 100 for the first time since 2010. Ranked fifth among states earlier in 2016, Arizona now ranks 17th, ahead of only Texas, Indiana, and Illinois.
Note: Analysis is provided for the 20 largest states based on U.S. population.
Metropolitan Employment Trend
Seattle maintains its large lead among metro areas with an index of 104.68, with Atlanta a strong second at 102.81. The pace of small business job gains has decreased more than three percent during the past year in both Dallas and Houston. However, Dallas remains in solid growth territory at 101.93, while Houston has the weakest index at 96.45, indicating job losses. Metro areas ranked four through six can be found along the Atlantic coast as Washington, D.C., Baltimore, and New York all have indexes above 101 and 12-month growth rates near two percent. Baltimore, which ranked last at the end of 2015, has improved employment conditions 2.96 percent so far in 2016 and now ranks fifth among metros.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Industry Employment Trend
Though it remains well above 100 and third among industries, Construction small business employment growth fell in October for the fourth consecutive month. Up 0.49 percent during the past year, Education and Health Services moved up to second place among industry sectors, its highest ranking since October 2012. Leisure and Hospitality had a large acceleration in October and is the only industry to have a positive 3-month growth rate. Manufacturing and Financial Activities remain the weakest sectors, with both slowing more than one percent during the past year. Other Services is down 0.76 percent during the last quarter, but, at 104.37, employment gains continue to outpace all other sectors.
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 October 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 Markit, a world leader in critical information, analytics and expertise, 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.
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 Markit (www.ihsmarkit.com)
IHS Markit (NASDAQ: INFO) is a world leader in critical information, analytics and expertise for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world's leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd. All other company and product names may be trademarks of their respective owners © 2016 IHS Markit Ltd. All rights reserved.
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