The CBIZ Small Business Employment Index (“SBEI”) opened 2021 with a seasonally adjusted decline of 1.29% for January. This marks the largest seasonally adjusted decrease for the index since May 2020, as small businesses continue to navigate pandemic-related restrictions and harsh winter weather. The CBIZ SBEI tracks payroll and hiring trends for 3,400 companies that have 300 or fewer employees, providing broad insight into small business trends.
“Vaccine optimism and a robust holiday season helped small businesses close the year strong; however, the pandemic’s impact continues to be felt across the sector,” said Philip Noftsinger, Executive Vice President, CBIZ, Inc. “This distress underlines the need for extended support through fiscal policy.”
The ADP and Moody’s employment report showed a more encouraging reading for January, with an increase of 174,000 private-sector jobs on a month-over-month, seasonally adjusted basis. Small businesses reported 51,000 additional jobs. The ADP and Moody’s report counts small businesses as companies with 49 or fewer employees, while the CBIZ SBEI uses data from companies with 300 employees or fewer.
From a geographic view, all four regions reported declines in the CBIZ SBEI, with the Northeast (-4.20%) and West (-4.18%) impacted most severely. This aligns with trends related to COVID-19 restrictions and resulting business closures. The Central (-0.46%) and Southeast (-0.23%) regions showed more modest employment dips.
Hiring also showed widespread declines at the industry level. Industries with the greatest pullbacks were Accommodation and Food Services and Arts and Entertainment. Agriculture, Government, Rental and Leasing Services, and Administrative and Support Services also experienced noteworthy decreases. Educational Services was the only industry to show an increase in hiring.
“The CBIZ SBEI mirrors broader business-closure trends in both the industrial and regional data,” Noftsinger added. “We’ll be closely monitoring these trends and how small businesses react as we progress through the first quarter.”
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