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Given that
small businesses have traditionally been among the first to hire new
employees during past recoveries, can we assume, based on the following
reports, that there is no recovery?
"NFIB
Jobs Statement: Hiring Trends Inconsistent and Disappointing"
(NFIB)
Chief economist
for the National Federation of Independent Business (NFIB) William C. Dunkelberg,
issued the following statement on April job numbers, based on NFIB’s
monthly economic survey that will be released on Tuesday, May 10, 2011. The
survey, conducted throughout the month of April, reflects 1,985
randomly-sampled small-business owner respondents:
“Four
months into 2011, the trajectory for small-business hiring appears
inconsistent and disappointing. February and March gave us some hope, but in
April, the average number of net new jobs slipped from 0.17 per firm to 0.04.
With fewer increases in new hires and more reports of shrinkage in
workforces, we can expect the April job numbers to be a disappointment.
“Drilling
down into the (seasonally adjusted) numbers:
- 8
percent of those surveyed increased employment;
- 15 percent reduced
employment; and,
- 14
percent reported unfilled job openings, down 1 point from last month.
“And the
outlook for future employment growth remains unchanged from March: Only 16
percent plan to increase employment, and 6 percent plan to reduce their
workforce, yielding a seasonally adjusted net 2 percent of owners planning to
create new jobs in the next three months.
“The
small-business community is still hurting. If the unemployment rate falls, it
will certainly not be a result of strong economic growth.”
"Shaky
Economy Stalls Small-Business Hiring" (Associated
Press)
Ken Levien has no plans to hire more people for his real
estate project management company in New York. Levien
says his business has only about 85 percent of the amount of work it can
handle because the building industry is still hurting from the recession.
“Things
are looking down in the construction business in New York City,” he
says.
Levien has
a lot of company. Many small-business owners aren’t hiring or expanding
because the outlook for the economy, or their own companies, is uncertain.
That raises the
question of whether small businesses will give the economy the boost that it
needs. Economists say that in past recoveries, small companies were the first
to hire. When the economy was improving, they were more nimble than large
companies because they didn’t have the bureaucracy that can slow the
hiring process. Their hiring helped propel the economy forward.
"CBIZ
Small Business Employment Index Shows Slim Gain for April"
(CBIZ, Inc.)
The CBIZ Small
Business Employment Index (SBEI), a barometer for hiring trends among
companies with 300 or fewer employees, increased by .05 percent during April,
following an increase of 1.66 percent in March. The uptick reflects the prognosis
for sluggish growth in employment and follows a disappointing report on
private sector job growth from ADP.
...
Additional
take-away points from the April data include:
At-a-glance: Of
the companies surveyed, the data shows that 22 percent reported an increase
in employee headcount while 25 percent decreased staffing. 53 percent of the
companies involved in the survey maintained their number of employees.
Small business
sector: Recent BLS data sets have shown a deceleration in hiring at all
levels and it would appear that small businesses are matching that trend.
What-to-watch:
With so much attention being placed on new business, the small business owner
is finely tuned to capacity needs related to imminent demand. There is very
little hiring in anticipation of longer range prospective demand.
"Majority
of Business Owners Do Not Plan On Hiring In The Near Future" (PRNewswire)
The Small
Business Authority, with a portfolio of over 100,000 business accounts,
announced today the findings of its SB Authority Market Sentiment Survey, a
monthly window into the concerns of independent business owners. Based on a
poll of over 2,600 respondents, one of the key findings from the April survey
is 67% of business owners do not plan on hiring in the next 6 to 12 months.
Additionally, 58% of business owners do not hire recent graduates. When
looking at the current 8.2% unemployment rate, 26% of business owners believe
that the rate will be higher on Election Day in November, while 40% think it
will be lower and 34% believe it will remain unchanged.
Small business
hiring – one of the primary components of the overall U.S. employment
picture – remained stagnant in April, according to the National Federal
of Independent Business.
"Why are Topeka’s Small Businesses Still Not
Hiring?" (Examiner.com)
The Topeka
Independent Business Association (TIBA) recently completed its second annual
Small Business Climate Survey. According to this survey, local businesses
don’t expect to make significant changes upward or downward in their
employment numbers this year. Only 18% of the businesses reported growth in
number of employees in 2011, with almost 28% anticipating a growth in 2012. A
majority of businesses surveyed reported no change in the number of employees
for 2011 and forecasted the same for 2012.
“Unfortunately,
Topeka is replicating what we see throughout the entire US
economy—relatively little growth in the number of jobs being
created,” said David Sollars, Dean and
Professor at the Washburn University School of Business.
Sollars
attributes the flat hiring to two primary reasons.
“First,
during the recession firms figured out ways to do the same or more with fewer
employees,” he says. “Probably more important, however, is the
general uncertainty faced by a business owner or manager.
Michael J. Panzner
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