Small businesses—employers of nearly half of the country’s workforce—remain strong in North Texas, according to a new report.

Citing payroll data from businesses with less than 50 employees, the most recent Small Business Employment Watch report from HR software firm Paychex and information services provider HIS Markit was released today. Dallas takes the top spot for both small business employment growth and wage earnings growth among other metro regions across the country.

“The small business economy still is in recovery phase with continued job gains, and, surprisingly, moderating wage gains,” said James Diffley, chief regional economist at IHS Markit, in a statement.

Dallas leads in small business employment growth

Paychex IHS Markit report puts Dallas at No. 1 in small business employment growth by metro. [Image: Paychex]

According to the report released today, the Dallas region ranked No. 1 for small business employment growth, marking a 4.2% year-over-year growth rate. The area also took the top spot in terms of hourly earnings, with 7.1% year-over-year growth putting it at an average of $30.91.

Metro Dallas also took the No. 1 spot in small business hourly earnings growth. [Image: Paychex]

Those numbers compare to a national 12-month small business job growth rate of 2.32% and an hourly earning growth of 5.1% at an average of $30.42 per hour.

While Texas took the No. 1 spot for employment growth with a year-over-year change of 2.13%, the state was ranked No. 5 for hourly earnings, with a nearly 5.8% change to an average of $29.32 per hour. Houston was ranked No. 2 in terms of employment growth with a 2.4% change.

Though the numbers remain strong for the region, the report notes that small business employment growth statewide has declined slightly from last month by 0.1%. and has been declining nationwide for the past four months. The report also notes that hourly earnings growth slowed nationwide for the first time since May 2021.

“Small business job growth remains at its highest pre-pandemic level since June 2016, despite slowing for the fourth consecutive month,” the report states.

Texas home to three million small businesses

Texas leads at No. 1 in small business employment growth, according to the Paychex IHS Markit report. [Image: Paychex]

According to a U.S. Small Business Administration report from last August, there are three million small businesses in Texas that employ 4.9 million workers. It adds that between March 2019 and March 2020 more than 72,000 small businesses were opened and nearly 130,000 jobs were created in the Lone Star state.

Across the country, the SBA says there are about 32.5 million small businesses, which it defines as having less than 500 employees. From 2000 to 2019, the organization says small businesses accounted for about 65% of net new job creation nationwide.

“Small businesses in the United States are important engines of economic growth that can help speed economic recovery in the wake of the COVID-19 pandemic,” said Major Clark, III, the SBA’s acting chief counsel, at the time the report was released.

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