Small Business Employment Growth Continued at a Steady Pace in March, According to the Paychex | IHS Small Business Jobs Index

The national index maintained its high level with a slight 0.05 percent decrease during March
Central regions seeing strong improvement in small business employment growth during the first quarter, while coastal regions slowed
Tennessee continued as the leader among states
Dallas overtook Atlanta for the top spot among metros
Leisure and Hospitality had the best growth rates among industries

Category:

Economics Media , Financial Markets

Tuesday, April 4, 2017 8:30 am EDT

Dateline:

Rochester, N.Y.

"Adding to the strong rebound seen since late 2016, small business jobs momentum continued in March"

Following three months of positive gains, the Paychex | IHS Small Business Jobs Index maintained its level with a slight 0.05 percent decrease from the previous month, moderating to 100.73. Year over year, the pace of small business employment growth is essentially unchanged.

The East South Central continues to lead all regions for the fifth consecutive month, while the West South Central is showing signs of improvement. Tennessee remains the top-ranked state. Dallas became the country’s new top metro area for small business jobs, following a 1.45 percent one-month decrease in Atlanta, which had held the top position. Leisure and Hospitality had the best growth rates among industries, gaining 0.33 percent in March and 1.57 percent year over year.

“Adding to the strong rebound seen since late 2016, small business jobs momentum continued in March,” said James Diffley, chief regional economist at IHS Markit.

“This month’s jobs index once again reflects consistent small business job growth, far above pre-recession levels,” said Martin Mucci , Paychex president and CEO.

The March 2017 Paychex | IHS Small Business Jobs Index

National Index

At 100.73, the current pace of small business job growth is essentially unchanged from last year. Furthermore, the national index averaged 100.71 during the first quarters of 2016 and 2017, signaling strong and steady small business job growth to begin the past two years. Small businesses have seen positive and consistent employment gains as the national index has now been above the 100 baseline since September 2011.

Regional Employment

Though the West South Central remains ranked last among regions and below 100, it has seen positive movement since hitting a seven-year low in November. The West South Central has improved 1.56 percent since November, best among regions, and it has the strongest one-month gain in March, 0.41 percent, possibly marking an energy sector rebound. Hitting a new record level and ranked first among regions at 103.83, neighboring East South Central had nearly as strong of a gain in March, 0.40 percent. Central regions have increased the pace of small business employment growth the fastest during the first quarter of 2017. The Atlantic and Pacific regions have shown the least movement, with the Middle Atlantic actually losing pace, down 0.35 percent during the past three months.

Note: Percentages displayed in the regional heat map reflect 12-month changes.

State Employment Trend

At 104.56, Tennessee handily remained the top-ranked state. Though unchanged in March, Tennessee had the strongest three-month and 12-month growth rates, 1.51 percent and 2.24 percent, respectively. Georgia lost its momentum from February, dropping 1.01 percent, but continues as the second-highest ranked state. Since spending most of 2014, 2015, and 2016 as the top-ranked state, Washington slowed for the sixth consecutive month. Ranked last among states in March 2016 and in the top ten this year, Missouri had the best one-month (0.54 percent) and second-best 12-month growth rates (2.00 percent). After spending six months ranked last among states, Illinois paired strong gains in February and March to overtake New York.

Note: Analysis is provided for the 20 largest states based on U.S. population. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.

Metropolitan Employment Trend

Essentially unchanged, at 102.93, Dallas overtook Atlanta for the top spot among metros, as the next five in the rankings all slowed in March. Slowing for the fifth time in the last six months, Seattle is down 3.32 percent, since peaking in September 2016. Nevertheless, the Seattle index indicates strong small business job gains at 101.89. Washington averaged 101.92 during the first quarter of 2017, representing the metro area’s strongest start to the year since 2007. Chicago improved for the third straight month, increasing to 100.19, only the second time its index has been over 100 during the past 12 months. At 97.86, Houston continues to lag all other metros, but has improved 1.79 percent since its November 2016 low.

Note: Analysis is provided for the 20 largest metro areas based on U.S. population. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.

Industry Employment Trend

Ranked second among industries, Leisure and Hospitality had the best growth rates, gaining 0.33 percent in March and 1.57 percent year over year. Besides a modest 0.29 percent gain in Trade, Transportation, and Utilities, Leisure and Hospitality is the only industry that has improved small business employment conditions during the past year. At 102.22 in March 2016, fast-paced gains in small business Construction jobs have steadily decelerated over the past 12 months, down 1.16 percent. Manufacturing gained 0.60 percent during the first quarter of 2017, but its index has remained the lowest among industries since March 2015.

Note: Analysis is provided for eight major industry sectors. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.

For more information about the Paychex | IHS Small Business Jobs Index, visit the index website . Plus, view and download the March 2017 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.

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 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.