Small business owners continue momentum with job creation strong in February

COLUMBUS – Small business owners are supporting a strong small business labor market with solid hiring, elevated levels of open positions and higher employee compensation in February, according to the National Federation of Independent Business monthly jobs report.

Owners added an average addition of 0.43 workers per firm, adding to a strong first quarter of 2020.

Finding qualified workers remains the top problem for owners, with 25 percent reporting this as their No. 1 problem. In construction, 45 percent cited the shortage of qualified labor as their top business problem and in manufacturing, 33 percent. The lack of qualified labor is constraining growth in these sectors.

“The labor shortage remains one of the biggest obstacles to a more robust small business economy,” NFIB Chief Economist Bill Dunkelberg said. “The lack of workers has slowed certain sectors like construction, manufacturing and transportation. But overall, the economy is strong and growing at a good pace.”

Chris Ferruso, legislative director for NFIB in Ohio, said, “The findings in our national report mirror many of our survey results here in Ohio. NFIB is spending the month of March hearing firsthand from our members across Ohio in conjunction with Lt. Gov. (Jon) Husted’s office, local business advisory councils and members of the education community to talk about current efforts and solutions going forward to help solve this hiring crisis.”

Thirty-eight percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up 1 point. Thirty-three percent reported openings for skilled workers (up 3 points), and 11 percent have openings for unskilled labor (down 3 points).

Thirty-four percent reported few qualified applications for their open positions, and 18 percent reported none. Reports of “few or no qualified applicants” were high in construction (65 percent), manufacturing (53 percent) and retail (52 percent).

Up from January, 15 percent of owners reported increasing employment an average of 1.6 workers per firm, and 2 percent (down two points) reported reducing employment an average of 4.9 workers per firm (seasonally adjusted).

A net 21 percent of owners (seasonally adjusted) plan to create new jobs, up 2 points. Twenty-eight percent plan to increase total employment at their firm, and 1 percent plan reductions. In construction, 38 percent plan to increase their employment and 0 percent plan reductions.

In attempting to fill open positions, a historically high percentage of owners plan to raise their employee’s compensation. A net 36 percent (seasonally adjusted) reported raising compensation, and a net 19 percent plan to do so in the coming months.

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