Report: Nevada top state for small-business growth
Nevada small businesses are leading the nation for payroll growth as the U.S. economy continues its trek toward recovery from the COVID-19 pandemic, a new report found.
The Silver State posted the biggest resurgence in payroll nationwide, with year-over-year growth of just under 30%, according to an analysis by insurance technology company Huckleberry. Nevada’s growth was double the rate of second-place Maryland’s 15% and more than three times that of thirdplace North Carolina’s 8%.
Payroll growth, which shows increases in average wage and salaries, is typically considered to be a good indicator for recovery as well as business confidence. The state also posted impressive numbers for insurance policy growth, which jumped by 165%.
“Nevada had the biggest bounce we’re seeing in terms of year-over-year applications for insurance policies,” Nick Dehn, a spokesman for Huckleberry, told the Reno Gazette Journal.
“Those are major numbers. Nevada is really an outlier here.”
Nevada’s top three recovering industries differ from the nation as a whole. Nationwide, electrical contractors topped the list for payroll growth, followed by retail stores and plumbing and HVAC contractors. In Nevada, the top three small-business sectors are administrative services, janitorial services and physician’s offices.
While the report does not dig deeper into what is driving the growth in the aforementioned small-business sectors, the numbers are a positive indicator for the overall health of those industries, according to Dehn.
“Payroll growth and increases in policy demand are excellent harbingers of what’s to come,” Dehn said. “When we see increases in a certain sector or industry, that indicates that there is some degree of faith in starting a new business in that sector.”
The numbers are good news for Nevada, which was hit especially hard by the economic effects of the pandemic. In April last year, Nevada posted a 28.2% unemployment rate amid mandatory shutdowns of businesses – the highest ever recorded for any state in history, including the Great Depression. The number has since dropped to 7.8% statewide, with the Las Vegas metro area seeing a 9.6% jobless rate and the Reno area doing better at 4.9%.
Nevada’s steep drop last year likely has to do with the state now posting the highest job growth rate amid the ongoing pandemic recovery, according to Dehn.
“That’s one of the possible threads that you can pull out of these trends,” Dehn said. “The harder they fall, the higher they bounce back.”
In a state that built a reputation for gambling, however, COVID-19 continues to be a wild card. The state has been dealing with an increase in cases due to the delta variant, with mask requirements being tightened once again for indoor workers in Las Vegas. Add the arrival of the lambda variant to the state this month and the pandemic continues to cast a large shadow on Nevada’s ongoing recovery.
“This was an unforeseen business disruption, the likes of which have never been seen,” Dehn said. “If there’s anything that the pandemic has really brought to the fore, it’s just how expensive it is to run a business and how quickly cash flow can evaporate.”