Here's what's happened in the small business economy this past month, based on payroll data for our over 18,000 small business customers.
The first quarter of 2007 is now officially over, and it appears that the small business economy is doing just fine.
The SurePayroll Hiring Index ended the month at 10,558, a 47-point increase (0.45%) from February.
Our Small Business Scorecard data has recorded four straight months of hiring growth.
Year to date, small business hiring has increased 1.1%. On an annualized basis, that puts small business hiring on track to grow 4.5% this year. To put that increase in perspective, recall that in 2006 small business hiring declined by 0.2%.
Salaries Still Rising
The SurePayroll Pay Index was 1,034 at the end of March, up two points from February, or 0.2%.
The average small business salary for the United States now stands at an annualized rate of $31,791. That’s the highest average salary we’ve seen since we started tracking the small business economy.
These strong gains in personal income don't seem to be losing steam. The March increase in salaries marked the nineteenth consecutive month of continued salary growth in the small business economy.
As we have discussed in the past, rising salaries help the economy by fueling consumer spending. However, they are a significant burden to business owners and create inflationary pressure on the economy because business owners will likely pass along their increased labor costs to their customers by raising prices.
Independent Contractors
The SurePayroll Contractor Index stands at 3.40% as of the end of March 2007. That means that for every 100 workers engaged by small business, 3.4 are 1099 independent contractors and 96.6 are W2 employees.
This slight decease in the use of independent contractors surprised us. We had expected the use of contractors to rise slightly in March.
Regional and State Performance
Small business hiring is up year to date in the Midwest, West, Northeast and South.
On the salary front, salaries are up year to date in the Midwest, South and West. The Northeast is the only region in which average small business salaries have dropped.
The West continues to lead the country in hiring growth and salary growth.
As depicted in the graphic below, results varied from state to state. The Scorecard comprises data from 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.
Year to date, firms have increased in size in 18 of our 21 benchmark states in March. Only three states — Florida, Virginia and Michigan — have experienced decreasing hiring year to date.
Year to date, salaries are up in 17 of our 21 benchmark states. Salaries have decreased year to date in New York, Indiana, Michigan and North Carolina.
Data for our benchmark states is available – just send me an e-mail 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.
Small Business Scorecards Archive:
