SURVEY: Small Business Optimism in the Doldrums; Owners Not Hiring, Expanding
Small businses optimism is in the doldrums, according to the National Federation of Independent Businesses' recent Small Business Optimism Index.
Small-business optimism remained flat in August, dropping 0.1 points from July,
The total reading showed little change over the prior month, but some details appeared "incongruent," an NFIB press release stated. Job creation plans went to pre-recession level and sales expectations improved, but quarter-to-quarter sales and profit trends deteriorated. And expectations for improved business conditions were negative.
North Carolina data isn't available, but Gregg Thompson, state director of NFIB/North Carolina, said small-business owners here are just as discouraged as those in other states.
Small-business optimism remained flat in August, dropping 0.1 points from July,
The total reading showed little change over the prior month, but some details appeared "incongruent," an NFIB press release stated. Job creation plans went to pre-recession level and sales expectations improved, but quarter-to-quarter sales and profit trends deteriorated. And expectations for improved business conditions were negative.
North Carolina data isn't available, but Gregg Thompson, state director of NFIB/North Carolina, said small-business owners here are just as discouraged as those in other states.
“I think the survey shows there’s still a lot of uncertainty out there,” Thompson said in an emailed statement. “You’re not going to invest in new employees or new equipment or a bigger space unless you’re pretty sure the investment is going to pay off. Right now, though, small-business owners don’t know what the health-care law is going to do to them. They don’t know what their taxes will be. And they don’t know what new regulations the government’s going to throw at them.”
Here are highlights from the August survey of 759 randomly sampled NFIB members and small business owners. (Download the complete survey here.)
JOB CREATION: August marked the fourth consecutive month of negative job growth for small-business owners. The average increase in employment for small firms surveyed was negative 0.3 workers per firm. Dramatic employment reductions have ceased but hiring has not resumed at normal levels.
JOB OPENINGS: Sixteen percent of all owners reported job openings they could not fill in the current period (down 4 points), and 9 percent reported using temporary workers, down 6 points from July. Most new jobs being created are likely to be in the part-time category, according to the NFIB.
SALES: The net percent of owners reporting higher nominal sales in the past three months compared to the prior three months plunged 17 points to a negative 24 percent — the second steepest monthly decline in survey history. The net percent of owners expecting higher real sales volumes surged 8 points, to 15 percent of all owners, a new high for this recovery period.
EARNINGS AND WAGES: Earnings trends took a hit in August with the major softening in sales, falling 13 points to negative 35 percent. Five percent of owners reported reduced worker compensation and 21 percent reported raising compensation, yielding a seasonally adjusted net 15 percent reporting higher worker compensation (up 1 point). A net 12 percent plan to raise compensation in the coming months, up 1 point.
CREDIT MARKETS: Credit continues to be a non-issue for small employers, 7 percent of whom say that all their credit needs were not met in August, up 2 points from July. Twenty-nine percent of owners surveyed reported all credit needs met, and 49 percent explicitly said they did not want a loan.
CAPITAL OUTLAYS: In August, the frequency of reported capital outlays over the past six months rose 3 points to 57 percent. The percent of owners planning capital outlays in the next three to six months rose 2 points to 25 percent.
EXPANSION PLANS: In August, only 7 percent characterized the current period as a good time to expand (down 2 points). The net percent of owners expecting better business conditions in six months was a net negative 10 percent, 4 points worse than July’s reading.
INVENTORIES: The pace of inventory reduction continued in August, with a net negative 11 percent of all owners reporting growth in inventories, 1 point down from July. For all firms, a net negative 1 percent (up 1 point) reported stocks too low, unchanged from July. Plans to add to inventories were up 3 points to a net 2 percent, in line with an improvement in expectations for sales growth.
INFLATION: Seventeen percent of the NFIB owners surveyed reported reducing their average selling prices in the past three months (up 3 points), and 18 percent reported price increases (up 1 point). The net percent of owners raising average selling prices was 2 percent, down 2 points. As for prospective price increases, 21 percent plan on raising average prices in the next few months (up 5 points), and 3 percent plan reductions (unchanged). A net 20 percent plan price hikes, up 5 points.
JOB CREATION: August marked the fourth consecutive month of negative job growth for small-business owners. The average increase in employment for small firms surveyed was negative 0.3 workers per firm. Dramatic employment reductions have ceased but hiring has not resumed at normal levels.
JOB OPENINGS: Sixteen percent of all owners reported job openings they could not fill in the current period (down 4 points), and 9 percent reported using temporary workers, down 6 points from July. Most new jobs being created are likely to be in the part-time category, according to the NFIB.
SALES: The net percent of owners reporting higher nominal sales in the past three months compared to the prior three months plunged 17 points to a negative 24 percent — the second steepest monthly decline in survey history. The net percent of owners expecting higher real sales volumes surged 8 points, to 15 percent of all owners, a new high for this recovery period.
EARNINGS AND WAGES: Earnings trends took a hit in August with the major softening in sales, falling 13 points to negative 35 percent. Five percent of owners reported reduced worker compensation and 21 percent reported raising compensation, yielding a seasonally adjusted net 15 percent reporting higher worker compensation (up 1 point). A net 12 percent plan to raise compensation in the coming months, up 1 point.
CREDIT MARKETS: Credit continues to be a non-issue for small employers, 7 percent of whom say that all their credit needs were not met in August, up 2 points from July. Twenty-nine percent of owners surveyed reported all credit needs met, and 49 percent explicitly said they did not want a loan.
CAPITAL OUTLAYS: In August, the frequency of reported capital outlays over the past six months rose 3 points to 57 percent. The percent of owners planning capital outlays in the next three to six months rose 2 points to 25 percent.
EXPANSION PLANS: In August, only 7 percent characterized the current period as a good time to expand (down 2 points). The net percent of owners expecting better business conditions in six months was a net negative 10 percent, 4 points worse than July’s reading.
INVENTORIES: The pace of inventory reduction continued in August, with a net negative 11 percent of all owners reporting growth in inventories, 1 point down from July. For all firms, a net negative 1 percent (up 1 point) reported stocks too low, unchanged from July. Plans to add to inventories were up 3 points to a net 2 percent, in line with an improvement in expectations for sales growth.
INFLATION: Seventeen percent of the NFIB owners surveyed reported reducing their average selling prices in the past three months (up 3 points), and 18 percent reported price increases (up 1 point). The net percent of owners raising average selling prices was 2 percent, down 2 points. As for prospective price increases, 21 percent plan on raising average prices in the next few months (up 5 points), and 3 percent plan reductions (unchanged). A net 20 percent plan price hikes, up 5 points.
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2 comments:
Do you think that these expansions also include outsourcing?
Small businses optimism is in the doldrums, according to the National Federation of Independent Businesses' recent Small Business Optimism Index.business
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