Here's what's happened in the small business economy this past month, based on payroll data for our over 15,000 small business customers.
In the world of small business, 2005 is starting off a bit flat.
Small business jobs increased very slightly by 0.1% in January. At the end of January, the average small business in the United States had 5.86 employees.
On an annualized basis, if this rate were sustained through the rest of 2005, this would equate to a 1.2% growth rate for small business jobs. This would fall far short of the 4.4% growth we saw in 2004 and would be much less than the 4.0% annual growth in hiring that SurePayroll is predicting for 2005.
As has been the trend for quite a while now, average paychecks headed in the opposite direction, decreasing 0.5% in January. If this rate were sustained throughout the rest of 2005, we'd have 5.8% drop in average small business paychecks. In 2004, average check size dropped by 4.8%. For 2005, SurePayroll is predicting a 3.0% drop in average small business paychecks.
On a regional basis, hiring was fairly flat in all regions. Small businesses increased slightly in size in the Northeast and the South in January. In the MidWest and West, small business got slightly smaller on average during January.
Looking at average paycheck size, the Midwest and the West trended down in January relative to December. In contrast, paychecks in the NorthEast and the South were getting bigger in January relative to December.
At the state level, results were mixed. We track data in all fifty states but we pay close attention to 21 states that we have earmarked as "benchmark states": Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Texas, Utah, Virginia, and Washington.
In January, salaries were up in 11 of our 21 benchmark states. Firms grew in size in 12 of our 21 benchmark states.
Data for our benchmark states is available – just send me an email and let me know if you want the data for your state.
I welcome any and all questions or suggestions regarding our Small Business Scorecard initiative. Feel free to contact me at malter@surepayroll.com or by phone at (847) 676-8420 ext. 7229.
Best regards,
Michael Alter
President
SurePayroll, Inc.
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