For small business, hiring depends on the industry

Associated Press Modified: October 10, 2012 at 5:30 pm •  Published: October 10, 2012
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NEW YORK (AP) — If you are trying to figure out if small businesses are hiring, it depends on where you look.

Just last Friday when the government was raising suspicious eyebrows with its report of a sudden drop in the unemployment rate so close to a presidential election, Andy Asbury was hiring a full-time employee to work at his Minneapolis real estate brokerage.

For Asbury, the need for a new employee was clear. Sales at his agency, Better Homes & Gardens Real Estate Area Leaders, are up 25 percent from a year ago and he's expecting them to rise more next year as the housing market continues to improve. He's getting signals from prospective sellers that things are going to get busier and he's gearing up.

"People are planting the seeds right now for when they want to make their move," he says.

Small businesses employ about half the nation's work force, or about 60 million people, so keeping track of how small business owners like Asbury are faring is key to figuring out if the economy is getting better or worse.

There are some encouraging signs. Asbury and others in the housing and construction industries are feeling confident enough to add workers. So are parts of the manufacturing industry as demand for cars and trucks picks up. Many companies in the health care field are bringing on new workers as the full implementation of the health care overhaul nears and baby boomers age.

The September report from the Bureau of Labor Statistics shows the gains. The number of salaried real estate workers has risen by 195,000 in the last 12 months. In the auto industry, including parts makers, employment is up by 51,700, or 7 percent. The BLS doesn't break out employment in health care consulting services, but hiring at management and technical consulting services for businesses is up by 637,000 or 5.8 percent.

There's also an often overlooked form of small business hiring — people who start their own companies and become self-employed. In September, 118,000 did that, according to the Labor Department.

But for all the good news, skeptics can find their fair share of evidence to support a gloomier view. Not all small companies are on a hiring spree. Many defense contractors are waiting to see how much Pentagon spending is cut under what's called sequestration. The budget cuts — which may be triggered Jan. 2, would come because lawmakers couldn't reach a budget deal — unless Congress stops them. Smaller retailers are holding back because the economy is still so uncertain.

It's been difficult to get a clear picture of small business hiring because there have been so many differing reports. A report Tuesday from the National Federation of Independent Business showed a fourth straight monthly drop in hiring at small companies during September. That was odds with a report last week from the payroll service company ADP. That one said that small businesses were hiring in September

"We're in a recovery, but it's still tepid and small business is not getting its share of the recovery — but maybe it will be soon," says Susan Woodward, an economist with Sand Hill Econometrics in Palo Alto, Calif.

Here are some snapshots of small companies that are hiring or holding off:

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HOPEFUL ABOUT HOUSING

The new employee at Andy Asbury's brokerage will do administrative and marketing work including postings on social media websites — a big change from the part-time bakery job he got following his graduation from the University of Minnesota earlier this year.

Asbury and his father started the brokerage in August 2011 after working at other real estate firms. They held off hiring until they believed business would grow enough to pay a worker's salary. Asbury did work like listing houses online until the brokerage hired a part-time administrative assistant in February. But he realized he also needed an employee who understood social media and who could also write articles that could promote the brokerage online.

"I kind of followed social media but I didn't grow up in it and live and breathe it," he says.

Asbury found the worker through one of his agents, who knew that the young man was looking for a job. "He actually reminded me of myself. I felt like was very intelligent and competent and someone I could trust to pick up on the things we needed to do pretty quickly," Asbury says.

Asbury has also taken on more agents, who work on commission. He now has 17, up from 10 at the start of 2012. He is hoping to double the number of agents he has in 2013 because homeowners are telling him they're thinking about putting their homes on the market.

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