Despite some isolated bright spots about the economy, a bevy of recent data on SMB confidence and hiring indicates business owners see the glass as not even half full.
Despite some isolated bright spots about the economy, a bevy of recent data on SMB confidence and hiring indicates business owners see the glass as not even half full.Any spirits that were buoyed by the Intuit hiring numbers released earlier this week were quickly brought back to low altitude by the latest ADP employment data. According to the March ADP National Employment Report, private employers cut 23,000 jobs last month.
By contrast, the Intuit Small Business Employment Index found that small business employment increased by 0.25%. The ADP data covers a much broader spectrum than the Inuit index, which tabulates data from approximately 50,000 small businesses with employee head counts or 20 or less. ADP processes paychecks from one of every six U.S. Employees and pulls data from a much broader sample that the Intuit Index: approximately 360,000 U.S. business clients representing more than 22 million U.S. Employees.
Not only did the ADP numbers indicate that jobs are still vanishing, but also the report found that small businesses, which ADP defines as companies with fewer than 50 employees, shed 12,000 jobs last month (large business with 500+ workers cut 7,000 jobs and midsize business with 50-499 workers cut 4,000 positions). One unscientific conclusion that could be drawn from comparing this data is that businesses using Intuit payroll services are hiring and those that use ADP are not.
It's a sign of how deeply mired in the economic doldrums we are at this point that the ADP data was heralded by some as positive news. Yes, 23,000 jobs are gone, but that's great news compared with the 500,000 that were being cut each month back in early late 2008 and early 2009. The Labor Department numbers for March are due out tomorrow and some predict that the report will indicate 200,000 to 250,000 new jobs created in March, but the ADP numbers have the tenterhooks fully loaded with breath-holding, egg-shell walking anticipation.
For SMBs, what is holding steady amid all this polling and data mania is a distinct lack of optimism.
For February, the Discover Small Business Watch showed a slight decline in small business confidence from January. The downward trend accelerated in March wit the index falling almost 10 points to the levels of March 2009. Business owners participating in the survey indicated deteriorating business conditions: 53% believe the business climate will get worse in the next 6 months (it was 37% in February). Commenting on the index, Ryan Scully, director of Discover's business credit card, said, "We've seen bigger month-to-month drops, but there is clearly a pattern here: Small-business owners don't like what they're seeing -- both at home and in the larger economy -- and they're responding by pulling back, rather than just holding the line,"
In local findings, PNC Financial Services Group released the findings of SMB telephone survey it sponsored in Pennsylvania only a third expect to see increased sales, and barely more than a quarter (28%) anticipate increased profits; only 11% plan to hire.
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