June Main Street Health Report: Due to early heat wave, businesses are experiencing a cool-off

Small businesses are experiencing a cool-down period due to the early summer heat. Heatwaves have dampened the pace of business recovery, with both businesses and employees feeling the impact.

Noteworthy trends this month:

Small business owners saw the lowest number of employees working in June over the past three years. This data is based on the distinct number of hourly workers with at least one clock-in.
Southern and Western states were hit the hardest, but Northern and Midwest states also experienced a slowdown because of the abnormal temperatures.
All industries are feeling the labor impact, with fewer employees working compared to previous years. The entertainment & hospitality industries continue to outpace other industries in terms of growth, even with temperatures rising.

Employee activity

Small business owners saw the lowest growth in number of employees working in June in the past three years.

In 2024, growth has slowed by mid-year, reflecting the broader impact of heatwaves on small businesses. May-June of this year saw growth of 1.0%, a noteable drop compared to previous years (1.8% in 2023 and 3.2% in 2022).

Key statistics:

January – February: 2.1% growth, down vs. 2022 but the highest of 2024.
February – March: A year over year improvement of 1.2%.
March – April: A drop in growth to 0.3%.
April – May: Saw a 1.1% increase, indicating some recovery and steady YOY.
May – June: Growth of 1.0%, steady vs. Apr-May but down from 1.8% in 2023 and 3.2% in 2022.

Hours worked

Employee activity came in well below historical norms as summer kicks off. The monthly change in the 7-day average of “Hours Worked,” relative to January 2024, highlights this trend. Hours worked is calculated from hours recorded in Homebase timecards.

Despite a strong start, 2024 saw fluctuations in hours worked with a significant drop in early spring (-0.7%) and another slowdown by the start of summer (1.0%).

Key statistics:

January – February: Small business employee activity saw a 2.7% rise, indicating a positive start to the year vs. 2021.
February – March: Activity held relatively steady with a 2.1% increase, out-performing previous years.
March – April: A drop to -0.7% suggests challenges during this period, although previous years showed slowed growth.
April – May: A healthy rebound to 2.0% reflects some recovery.
May – June: Another drop to 1.0%, showing minimal growth versus previous years and the second lowest period of 2024.

Regional impact

Southern States were hit hard by the latest heatwave. “Businesses open” is down this month as many Southern States faced +100°F temperatures, with other core economic indicators trending downwards (hours worked, employees working) in the Southeast.

Key statistics:

Midwest: A notable 4% increase in hours worked and employees working, with slow growth in businesses open.
Northeast: Slight upwards trend in businesses open and a 3% rise in employees working.
Southeast: Experienced significant declines, showing a -1.0% drop in businesses open and -0.2% in employees working.
Southwest: Slight increase in hours worked and employees working, with a slight decline of -0.4% in businesses open.
West: Negative trend of -0.8% in businesses open and flat growth in employees working.

Industry-specific insights

Every industry is feeling the labor impact lately, with growth coming in lower across all industries relative to previous years.

Key statistics:

Beauty & Wellness: 2024 saw a 2% increase, compared to 3% in 2023 and 6% in 2022.
Caregiving: Came in flat at 0.1%, still down YOY.
Entertainment: Increased by 20% in 2024, but still down from 26% in 2022.
Food & Drink: Matching 2023’s growth of 1%.
Hospitality: Grew by 6% in 2024, a significant drop from 15% in 2022.
Retail: Similar to last year, grew by 2%.
Home & Repair: Grew by 3%, down versus previous years.
Medical & Veterinary: Declined by -2%, escalating the decline seen in 2023.

This June report shows that the extreme weather has impacted small business operations, with notable declines in employee activity and hours worked. Regional and industry-specific data reveal the widespread effects, underscoring the need for strategies to mitigate weather-related disruptions and support business recovery.

View a PDF below of our full June 2024 Main Street Health Report. If you choose to use this data for research or reporting purposes, please cite Homebase.

June 2024 Homebase Main Street Health Report

Our data is publicly available so that policy makers and academics can better understand small businesses. If you’re interested in more granular data, or have questions about the dataset, email us at data@joinhomebase.com

The post June Main Street Health Report: Due to early heat wave, businesses are experiencing a cool-off appeared first on Homebase.

SOURCE: https://joinhomebase.com/blog/june-2024-main-street-health-report/ https://joinhomebase.com/