California nearing 5-year low in rate of small business job growth.

By Kevin Truong, San Francisco Business Times.

The rate of California’s small business job growth has dropped even further from last month and is now nearing a five-year low for the state, according to a report from payroll processing company Paychex and market research firm IHS.

“California’s recent weakening stems from a retrenchment in the high tech sector, seen notably in San Francisco and San Diego,” said Jim Difley, chief regional economist at IHS Markit.

The report’s small business jobs index takes into account data from more than 350,000 small businesses across the country to track employment trends. An increase in the index number corresponds to an acceleration in job growth, while a decrease means that growth is slowing down or reversing.

Its geographic area – which included states on the West Coast – was the worst-performing region nationally when compared to last month’s data.

The San Francisco metropolitan area specifically has seen a 1.88 percent drop over the past 12 months. Its small business index score of 99.97 was the fifth lowest among the country’s 20 largest metropolitan areas.

While on the whole, small business job growth was swung upwards among much of the nation, San Francisco’s relative performance is indicative of the city’s business environment for small business.

A June report released by Thumbtack, a service that connects people with skilled local professionals, ranked San Francisco as one of the least friendly cities for small businesses in the country.

The study asked more than 12,000 skilled professionals nationwide across a variety of industries to rate the “friendliness” of state and local policies to small businesses.