Sageworks, ADP Report Continuing Small Business Slowdown

Sales, profits, payrolls under pressure.

Dreary new economic trend reports from Sageworks and ADP are mirroring last week’s dismal findings from Intuit, SurePayroll and the U.S. Bureau of Labor Statistics.

ADP’s monthly payroll survey shows American business added a paltry 42,000 jobs in July, continuing a six-month stall in hiring. At the same time, Sageworks, the financial analytics software maker, shows small business cost-costing was the only thing supporting margins.

The ADP National Employment Report, said ADP CEO Gary Butler, “shows continued weakness in the jobs market,  in part caused by the uncertainty in the economy and general business climate.”

“American businesses are on the cusp of recovery, but more effective incentives are needed to encourage business investment resulting in the creation of more jobs,” Butler says.

July’s rise in private employment was the sixth consecutive monthly gain reported by ADP. However, over those six months increases have averaged a modest 37,000, with no evidence of acceleration.

Meanwhile, Sageworks reports continuing sales declines at small businesses.

Only payroll cuts are helping managers maintain and boost margins.

It’s hard to expect increases in hiring anytime in the near future, at least not until sales are consistent and sustainable.

Posted on August 11, 2010