Good news first: The Paychex / IHS national small business jobs growth index remains near record highs, as Washington state leads and Arizona shows strong improvement. Dallas ranked as June’s top performing metro area, surpassing San Francisco, Seattle, and Houston.
The bad news: Overall, the jobs growth index decreased slightly for the second straight month.
“Though the pace of gains remains moderate, the Paychex | IHS Small Business Jobs Index shows that payroll conditions have clearly improved this year for the country’s small businesses,” said James Diffley, chief regional economist at IHS.
“With the first six months of the year behind us, we continue to see a positive trend in small business employment growth,” said Martin Mucci, president and CEO of Paychex. “Even though the growth rate has slowed slightly over the past two months, the consistent growth in key regions, states, and metro areas is an encouraging sign.”
Although the Paychex | IHS Small Business Jobs Index nudged down again in June, to its lowest level since January, the index remained over 101 for the sixth consecutive month. The 101.13 average for the first half of 2014 compares favorably to the 100.71 average for the last six months of 2013.
The Mountain region continues to lead in year-over-year gains at 1.77 percent, while the Middle Atlantic region once again showed the weakest growth, declining 0.39 percent during the past 12 months through June. After falling four out of the five months to begin 2014, the East South Central region had the best 1-month growth rate, advancing 0.41 percent in June.
State Employment Trend
Washington leads all states in the Small Business Jobs Index at 103.24, with Wisconsin, Indiana, and Texas also above 102 in June. With a 1-month growth rate of 1.02 percent, the Indiana index jumped seven spots to the number three ranked state. Growing quickly, Arizona small business employment conditions advanced further in June, increasing 0.58 percent during the past month and 2.87 percent over the past year. At 101.06, the Arizona index surged to its highest level since early 2007.
Metropolitan Employment Trend
At 104.02, Dallas topped all metros in the Small Business Jobs Index in June as the 1-month growth rate spiked 1.07 percent. San Francisco and Seattle rounded out the top three with levels above 103. For the third consecutive month, Tampa Bay, Baltimore, and Washington were the only metro indices below 100.
Launched on April 1, the monthly index from 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, provides 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, and metro employment activity. The index uses a base year of 2004, a period of expansion before the start of the economic downturn. When the index trends up it is a sign of a strengthening job market, and when it trends down it is a sign of a slowdown.