CHERRY HILL, N.J. (AP) — Many small business owners are holding back on adding more employees in the coming months because of concerns about the economy — even as some report that their businesses are understaffed.
That's the main takeaway of a new poll of more than 500 small business owners along the East Coast by lender TD Bank.
Seventy percent of the respondents said they plan to maintain their current employee levels. Only 21 percent said they plan to hire one or more workers in coming months.
Among the respondents, 35 percent said they were somewhat or significantly understaffed, the bank said.
Small businesses employ about half of all U.S. workers, so the survey findings don't bode well for a pickup in the pace of hiring by the private sector.
The U.S. gained an average of only 75,000 jobs in the April-June quarter, after averaging 226,000 in the first three months of the year. The slowdown in job growth has come as the U.S. economy continues to plod along at a sluggish pace, stoking concerns that employers may be holding back on plans to hire more workers.
The Labor Department will report job figures for July on Friday. Employment at small companies fell slightly in June, according to the National Federation of Independent Business, which each month surveys its members.
Intuit Inc., which makes software for small and mid-sized businesses, presents a mixed picture for small companies. The company's latest employment index, which is based on data collected from about 82,000 small business employers, shows that small business employment rose 0.17 percent nationwide in July. However, Intuit said its customers' revenue fell 0.5 percent in June. Its revenue index is based on data collected from 150,000 small businesses.
More than half of the respondents to the TD Bank survey said they are not optimistic about the U.S. economy.
Twenty-nine percent of the small business owners in the poll said they're most concerned about sales declining in the next six months. Rising health care and insurance costs was the biggest concern for 27 percent, while cash flow worries topped the list for 23 percent of respondents.
Beyond economic worries, 42 percent of the small business owners who participated in the survey said they're struggling to find new qualified candidates to hire.
And about 5 percent report that their biggest challenge when it comes to staffing is continuous employee turnover.
The TD Bank survey was conducted over the telephone in June and was restricted to companies with annual sales of less than $5 million.