B2B Payments

SMBs Start The Year With Jobs, Late Payments, FX Struggles

Jobs numbers were off to a rocky start for the year when new data from the U.S. Department of Labor revealed lower-than-expected jobs numbers for the month of December. But when it comes to small business (SMB) hiring, the numbers don’t always present a clear picture.

In fact, the latest research on small business performance goes far beyond hiring stats. In this week’s B2B Data Digest, PYMNTS digs into surveys on SMBs to explore how entrepreneurs are stepping into the new year, from business confidence to access to financing to global outlook. As it turns out, a clear picture of the state of small businesses is difficult to grasp, with some reports contradicting others. See what we mean in our breakdown of the data below.

 

—75 percent of U.K. SMBs are optimistic about their access to financing in 2018, representing a significant improvement over Q4 2016 figures, when just 63 percent said they felt that same optimism. The data, released by Aldermore in its Future Attitudes report, also found that confidence has improved when it comes to expectations of revenue increases over the year. Half of SMBs said they plan to increase investment in marketing, and 39 percent said they are gearing up to release new products or services this year. A third said they plan to expand into new markets.

—One in seven entrepreneurs plan to shrink or close their businesses in the coming quarter, according to the U.K.’s Federation of Small Business (FSB). Its quarterly survey contradicts conclusions from the Aldermore report, highlighting the challenges businesses in the nation are facing in Q1. According to news from The Telegraph, the FSB’s index turned negative for the first time since the Brexit vote. Nearly a third (31 percent) of SMBs said they expect business conditions to worsen in the quarter — just 27 percent expect them to improve. Retailers and construction businesses are among the most pessimistic, the FSB found.

—67 percent of U.K. SMBs with foreign exchange (FX) requirements have been adversely impacted by FX volatility in the last year, found Bibby Financial Services (BFS) in its latest report. The company also revealed that currency fluctuations represent global SMBs’ largest challenge. Researchers calculated that, on average, FX fluctuations have led to a financial impact of more than $94,500 each. BFS Managing Director for Foreign Exchange Michael McGowan said Brexit sparked drastic fluctuations in currency value that have, despite common misconception, negatively impacted exporters.

—1.55 percent more jobs were added among SMBs in December 2017 compared to November, according to the CBIZ Small Business Employment Index, which analyzes hiring activity among U.S. firms with 300 employees or fewer. It’s a positive sign, considering the 0.44 percent increase in month-over-month hiring activity seen in November. CBIZ President of Employee Services Organization Philip Noftsinger described the report as “the strongest reading since June 2017.”

—$26.14: the average hourly earnings for U.S. small businesses in December, an increase of 2.76 percent year over year, according to new data from Paychex. Its Small Business Jobs Index wasn’t all good news, however: Tt closed 0.16 percent in December to 99.70, representing a slowdown in small business hiring for the year, despite overall acceleration of the national economy. Paychex President and CEO Martin Mucci told CNBC that, despite the slowdown, “moderate job growth” remains and is expected to persist into the new year.

—62 percent of invoices sent by U.K. SMBs in 2017 were paid late, according to MarketInvoice. That means the late payments problem in the nation seems to be getting worse, despite action by the government to curb the issue. Those invoices were worth a collective $28.5 billion in delayed payments to small- and medium-sized businesses, with an average invoice value of about $70,300. Some corporate customers took as long as six months to pay those bills, researchers noted, and 30 percent were paid two weeks later than the agreed-upon due date. The food and beverage industry, energy businesses and wholesalers saw some of the highest proportions of invoices paid late, MarketInvoice said.

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