Job creation among small businesses broke the 45-year record in February with a net addition of 0.52 workers per firm, according to NFIB’s monthly jobs report, released today. The previous record was in May 1998 at 0.51 workers per firm. The percent of owners citing labor costs as their most important problem also hit an all-time high, with 10 percent of owners reporting labor costs as their biggest problem.
“Small businesses are creating new jobs at an all-time high, which has massive implications for the economy since two of every three new jobs is created by a small business,” said NFIB President and CEO Juanita Duggan. “Owners are doing everything they can to hold onto the employees they have, while trying to produce effectively without a full staff.”
Up one point from January, 57 percent of owners reported hiring and trying to hire, with 49 percent of those owners reporting few or no qualified applicants for open positions. Owners again cited the difficulty of finding qualified workers as their Single Most Important Business Problem at 22 percent, only three points below the record high. Thirty-seven percent reported job openings they could not fill in the current period, two points below the record high.
“With the government shutdown behind us, the labor markets will get back to normal,” said NFIB Chief Economist Bill Dunkelberg. “However, it appears that the shortage of workers will continue to restrain Main Street growth. If businesses were fully staffed, more could be produced and sold. Owners are reporting increasing employment at their firms at the highest rates in survey history, now they just need workers to fill them.”
The February jobs report showed that owners are still planning to expand their workforce with a seasonally-adjusted 16 percent of owners planning to create new jobs in the next three months. Job creation plans were strongest in construction (net 42 percent) and manufacturing (net 28 percent). Along with creating new jobs, owners continued to increase employee compensation at a solid rate. In February, a net 31 percent reported higher compensation and a net 18 percent planned increases in the next few months.
The labor markets are tight for both skilled and unskilled workers. Thirty-one percent of owners reported openings for skilled workers, and 14 percent reported openings for unskilled labor.