Small business optimism up, salaries down in March

An optimistic outlook towards the economy prevailed among small business owners in March, according to a study by online payroll service SurePayroll. In the same time, salaries dropped 0.89 percent in one month. The survey was completed on March 30th and consisted of 234 respondents randomly selected from the 25,000 small businesses.

71 percent of respondents indicated they are optimistic about the small business economy. In citing why they are optimistic about the economy, 47 percent mentioned their own cash flows and revenues as their primary reason for being optimistic. Twelve percent cited the small business stimulus program as their primary reason for being optimistic. Six percent attributed their growing optimism to the recent performance of the stock market. The remaining optimists cited a variety of other reasons, ranging from long waits at local restaurants to strong faith to a belief that the typical economic cycle is running its course.

The SurePayroll Pay Index now stands at 1,010, down from February's reading of 1,019. The drop in salaries during the months of February and March are the biggest since December 2004. The average small business annual paycheck in the United States is now $31,039. In March 2008, it was $32,579.

Another notable finding of the survey is the rising number of contractors: for every 100 workers engaged by small businesses, 3.88 are 1099 independent contractors and 96.12 are W-2 employees. In other words, more than ever before, small business owners are opting to engage an independent contractor rather than hire an employee.

The Midwest, Northeast and South experienced hiring growth in March. The West was the only region that experienced a hiring contraction in March.