NFIB SMALL BUSINESS ECONOMIC TRENDS William C. Dunkelberg Holly Wad May 214 Based on a Survey of Small and Independent Business Owners SMALL BUSINESS OPTIMISM INDEX COMPONENTS Index Component Seasonally Adjusted Level Change from Last Month Contribution to Index Change Plans to Increase Employment 8% 3 16% Plans to Make Capital Outlays 25% 1 5% Plans to Increase Inventories 3% 2 1% Expect Economy to Improve - 9% 9 48% Expect Real Sales Higher 1% - 2-1% Current Inventory - 1% - 1-5% Current Job Openings 24% 2 1% Expected Credit Conditions - 6% 1 5% Now a Good Time to Expand 8% % Earnings Trends - 2% 4 21% Total Change 19 1% (Column 1 is the current reading; column 2 is the change from the prior month; column 3 the percent of the total change accounted for by each component; * is under 1 percent and not a meaningful calculation)
NFIB SMALL BUSINESS ECONOMIC TRENDS NFIB Research Foundation has collected Small Business Economic Trends Data with Quarterly surveys since 1973 and monthly surveys since 1986. The sample is drawn from the membership files of the National Federation of Independent Business (NFIB). Each was mailed a questionnaire and one reminder. Subscriptions for twelve monthly SBET issues are $25. Historical and unadjusted data are available, along with a copy of the questionnaire, from the NFIB Research Foundation. You may reproduce Small Business Economic Trends items if you cite the publication name and date and note it is a copyright of the NFIB Research Foundation. NFIB Research Foundation. ISBS #94791-24-2. Chief Economist William C. Dunkelberg and Senior Policy Analyst Holly Wade are responsible for the report. IN THIS ISSUE Summary.............................. 1 Commentary........................... 3 Optimism.............................. 4 Outlook............................... 4 Earnings...............................6 Sales................................. 7 Prices.................................8 Employment............................ 9 Compensation......................... 1 Credit Conditions....................... 12 Inventories............................ 14 Capital Outlays......................... 16 Most Important Problem................. 18 Survey Profile......................... 19 Economic Survey....................... 2
SUMMARY OPTIMISM INDEX The NFIB Index of Small Business Optimism jumped 1.8 points from last month to 95.2. This is the first time the Index has reached 95 since October 27. The gain is modest but it is still the best reading post-recession. The main contributor to the improved Index came from expected business conditions. Small business owners are a bit more optimistic in this area but still 9 percent more owners expect business conditions to deteriorate than improve. LABOR MARKETS NFIB owners increased employment by an average of.7 workers per firm in April (seasonally adjusted), weaker than March but the seventh positive month in a row and the best string of gains since 26. Fifty-one percent of the owners hired or tried to hire in the last three months and 41 percent reported few or no qualified applicants for open positions. GDP did not grow in the first quarter, so not a lot of new workers were needed. The weather was bad in the first quarter but since the U.S. was not uniformly frozen, the weakness in employment and GDP growth cannot be blamed entirely on Mother Nature. Twenty-four (24) percent of all owners reported job openings they could not fill in the current period (up 2 points). Fourteen percent reported using temporary workers, up 1 point from March. Job creation plans reversed a recent negative trend and rose 3 percentage points to a seasonally adjusted net 8 percent. However, not yet back to January s reading of 12 percent. CAPITAL SPENDING Fifty-seven (57) percent reported outlays, up 1 point. The percent of owners planning capital outlays in the next 3 to 6 months also increased 1 point to 25 percent. Eight percent characterized the current period as a good time to expand facilities (unchanged). Of those who said it was a bad time to expand (5 percent), 26 percent still blamed the political environment, suggesting that at least for these owners, Washington is preventing their spending on expansion. PROFITS AND WAGES Earnings trends improved 4 points to a net negative 2 percent, the best reading since 27. Two percent reported reduced worker compensation and 23 percent reported raising compensation, yielding a seasonally adjusted net 2 percent reporting higher worker compensation (down 3 points), but still among the best readings since 28. A net seasonally adjusted 14 percent plan to raise compensation in the coming months, unchanged from February. The reported gains in compensation are now solidly in the range typical of an economy with solid growth. This survey was conducted in April 214. A sample of 1,799 small-business owners/members was drawn. One thousand six hundred and ninety-nine (1,699) usable responses were received a response rate of 16 percent. 1 NFIB Small Business Economic Trends Quarterly Report
SUMMARY INVENTORIES AND SALES The pace of inventory reduction was steady, with a net negative 6 percent of all owners reporting growth in inventories (seasonally adjusted). Reductions are good if in response to strong sales, but not so good if it is in response to weak sales. Owners are satisfying orders with existing inventory but not ordering new stocks. The net percent of owners viewing current inventory stocks as too low lost a point, falling to a net negative 1 percent, historically a lean reading. Sales trends did improve, although remained historically weak and probably insufficient to produce a substantial reduction in inventories. The solid reading for expected real sales contributed to the need to rebuild with the net percent of owners planning to add to inventory stocks gaining 2 points to a net 3 percent, following a large 6 point gain in March. The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past 3 months compared to the prior 3 months improved 4 points to a net negative 2 percent, far better than the negative 34 percent readings in 29). Fifteen (15) percent cite weak sales as their top business problem, high but approaching levels experienced in normal times. This is the best seasonally adjusted reading since early 212 when the economy temporarily reach a more normal growth path. Expected real sales volumes posted a 2 point decline after a strong 9 point gain in March, falling to a net 1 percent of owners. While falling a bit, it is still the third highest reading since early 212. INFLATION Seasonally adjusted, the net percent of owners raising selling prices was a net 12 percent, up 3 points after an 8 point rise in March. Twenty-five (25) percent plan on raising average prices in the next few months (up 2 points). Only 3 percent plan reductions (unchanged), far fewer than actually reported reductions in past prices. Seasonally adjusted, a net 22 percent plan price hikes (up 3 points). If successful, the economy will see a bit more inflation. 2 NFIB Small Business Economic Trends Quarterly Report CREDIT MARKETS Five percent of the owners reported that all their credit needs were not met, 1 point above the record low. Thirty percent reported all credit needs met, and 53 percent explicitly said they did not want a loan. Only 1 percent reported that financing was their top business problem (the record low). Thirty (3) percent of all owners reported borrowing on a regular basis, down 1 point. A net 5 percent of regular borrowers reported loans harder to get compared to their last attempt, a 3 point improvement. The average rate paid on short maturity loans was up a tenth at 5.4 percent. The net percent of owners expecting credit conditions to ease in the coming months was a seasonally adjusted negative 6 percent, more owners expect that it will be harder to arrange financing than easier (1 point better than March). The start of tapering seems to have not impacted expectations much. The appointment of the new Federal Reserve Board members will have little impact on policy. Owners remain more concerned about taxes, regulations and health care costs.
COMMENTARY With the unemployment rate falling to 6.3 percent and headed lower, the Federal Reserve will soon be able to declare victory, leaving economists to debate for years whether QE2 and QE3 really helped or hindered the recovery. The U.S still has $3 trillion in excess reserves sitting at the Federal Reserve, potentially available to support an expansion in loans. The Federal Reserve portfolio has over $4 trillion earning interest that currently accounts for about 1 percent of record-high after-tax corporate profits. Yes, the Federal Reserve is a private firm. This is just one of the major distortions created by the Federal Reserve, and it s not the worst. Since 29, consumers have lost trillions of dollars in interest income, a damper on consumer spending. Interest expense per share for the larger firms have fallen by more than 5 percent helping earnings per share to hit record high levels, all based on unreal interest rates. The first quarter preliminary print on GDP growth was.1 percent, virtually no change but likely to be revised a bit lower due to the trade deficit. Consumer spending might have been a bit stronger as March data are finalized. Job growth was a lot better than expected for the first quarter, so one wonders where s the GDP that all these workers are making? Of course, hours worked didn t go up much, so more people working fewer hours means not so much growth in output. And 8, people dropped out of the labor force which accounted for much of the decline in the unemployment rate. The President is pushing for a 39 percent increase in the minimum wage. He apparently is not listening to the CBO but to political advisors. There is no doubt that raising the minimum wage will cost jobs. The CBO estimates 5, will lose all their income and the chance to gain experience and move ahead. On FOX, a supporter argued that McDonalds made $5 billion and could afford to give up some, forgetting that individual franchises and company stores must stand on their own. If all the independent burger joints suddenly put a golden arch over them and we added them up to get one big profit number, that doesn t change the economics for each firm. Arguing that this will produce more spending assumes the increased labor costs are covered by the Federal Reserve I guess, since in reality every dollar a minimum wage worker gets will come out of the pockets of customers, and owners, and those who lost their job who will have less to spend, a wash at best. Some really poor thinking. The President most recently touted policies such as raising the minimum wage, extending unemployment benefits and passing some sort of equal pay for equal work legislation as his plan to boost the economy. He also mentioned one billion in his budget for climate change and a Keystone delay that will surely boost the economy. This makes it quite clear that politics drives policy recommendations, not common sense. And governing through politics will not improve owner optimism. It s going to be another nasty election. Most of the policy changes that would improve small business owners views of the outlook won t happen. Growth will push ahead, boosted by population growth, depreciation driven demand for replacement and continued healing from the recession damage, but no rapid pickup in spending or hiring. 3 NFIB Small Business Economic Trends Quarterly Report
OVERVIEW - SMALL BUSINESS OPTIMISM OPTIMISM INDEX Based on Ten Survey Indicators (Seasonally Adjusted 1986=1) 11 Index Value (1986=1) 1 9 8 7 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 OPTIMISM INDEX Based on Ten Survey Indicators (Seasonally Adjusted 1986=1) 29 84.1 82.6 81. 86.8 88.9 87.8 86.5 88.6 88.8 89.1 88.3 88. 21 89.3 88. 86.8 9.6 92.2 89. 88.1 88.8 89. 91.7 93.2 92.6 211 94.1 94.5 91.9 91.2 9.9 9.8 89.9 88.1 88.9 9.2 92. 93.8 212 93.9 94.3 92.5 94.5 94.4 91.4 91.2 92.9 92.8 93.1 87.5 88. 213 88.9 9.8 89.5 92.1 94.4 93.5 94.1 94.1 93.9 91.6 92.5 93.9 214 94.1 91.4 93.4 95.2 SMALL BUSINESS OUTLOOK 4 NFIB Small Business Economic Trends Quarterly Report Percent "Good Time to Expand" (thick line) 3 2 1 OUTLOOK Good Time to Expand and Expected General Business Conditions January Quarter 1974 to April Quarter 214 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14 8 6 4 2-2 -4 Percent "Better" Minus "Worse" Expected General Business Conditions (thin line)
SMALL BUSINESS OUTLOOK (CONTINUED) OUTLOOK FOR EXPANSION Percent Next Three Months Good Time to Expand 29 6 3 1 4 5 4 5 5 9 7 8 7 21 5 4 2 4 5 6 5 4 6 7 9 8 211 8 7 5 4 5 4 6 5 6 7 8 1 212 9 8 7 7 7 5 5 4 7 7 6 8 213 6 5 4 4 8 7 9 6 8 6 9 1 214 8 6 8 8 MOST IMPORTANT REASON FOR EXPANSION OUTLOOK Reason Percent by Expansion Outlook April 214 Reason Good Time Not Good Time Uncertain Economic Conditions 5 26 17 Sales Prospects 3 3 3 Fin. & Interest Rates 1 1 1 Cost of Expansion 3 4 Political Climate 13 1 Other/Not Available 2 4 3 OUTLOOK FOR GENERAL BUSINESS CONDITIONS Net Percent ( Better Minus Worse ) Six Months From Now 29-12 -21-22 2 12 7-3 1 8 11 3 2 21 1-9 -8 8-6 -15-8 -3 8 16 9 211 1 9-5 -8-5 -11-15 -26-22 -16-12 -8 212-3 -6-8 -5-2 -1-8 -2 2 2-35 -35 213-3 -28-28 -15-5 -4-6 -2-1 -17-2 -11 214-11 -19-18 -9 5 NFIB Small Business Economic Trends Quarterly Report
SMALL BUSINESS EARNINGS EARNINGS Actual Last Three Months January Quarter 1974 to April Quarter 214-1 Net Percent -2-3 -4-5 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14 ACTUAL EARNINGS CHANGES Net Percent ( Higher Minus Lower ) Last Three Months Compared to Prior Three Months 29-47 -44-46 -43-43 -42-45 -4-4 -4-43 -43 21-42 -39-43 -31-28 -32-33 -3-33 -26-3 -34 211-28 -27-32 -26-24 -24-24 -26-27 -26-28 -22 212-24 -19-23 -12-15 -22-27 -28-27 -26-32 -29 213-26 -26-23 -23-22 -23-22 -21-23 -23-24 -22 214-27 -27-24 -2 6 NFIB Small Business Economic Trends Quarterly Report MOST IMPORTANT REASON FOR LOWER EARNINGS Percent Reason April 214 Reason Current Month One Year Ago Two Years Ago Sales Volume 15 18 15 Increased Costs* 11 14 1 Cut Selling Prices 2 3 3 Usual Seasonal Change 8 6 6 Other 5 2 4 * Increased costs include labor, materials, finance, taxes, and regulatory costs.
SMALL BUSINESS SALES Net Percent 5 4 3 2 1-1 -2-3 SALES Actual (Prior Three Months) and Expected (Subsequent Three Months) January 1974 to April 214 Expected Actual -4 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14 ACTUAL SALES CHANGES Net Percent ( Higher Minus Lower ) Last Three Months Compared to Prior Three Months 29-31 -28-34 -28-33 -34-34 -27-26 -31-31 -25 21-26 -26-25 -15-11 -15-16 -16-17 -13-15 -16 211-11 -11-12 -5-9 -7-8 -9-1 -12-11 -7 212-6 -7 1 4 2-5 -9-13 -13-15 -15-1 213-9 -9-7 -4-4 -8-7 -6-6 -8-8 -8 214-1 -8-6 -2 SALES EXPECTATIONS Net Percent ( Higher Minus Lower ) During Next Three Months 29-2 -29-31 -11-5 -1-11 -5-6 -4-2 -1 21 3-3 6 5-5 -4-3 1 6 8 211 13 14 6 5 3-2 -12-6 -4 4 9 212 1 12 8 6 2-3 -4 1 1 3-5 -2 213-1 1-4 4 8 5 7 5 8 2 3 8 214 15 3 12 1 7 NFIB Small Business Economic Trends Quarterly Report
SMALL BUSINESS PRICES PRICES Actual Last Three Months and Planned Next Three Months January Quarter 1974 to April Quarter 214 Net Percent 7 6 5 4 3 2 1-1 -2-3 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14 Actual Planned ACTUAL PRICE CHANGES Net Percent ( Higher Minus Lower ) Compared to Three Months Ago 29-15 -24-23 -24-22 -17-19 -19-21 -17-17 -22 21-18 -21-2 -11-15 -13-11 -8-11 -5-4 -5 211-4 5 9 12 15 1 7 1 6-1 212-1 1 6 8 3 3 8 9 6 5 213 2 2-1 3 2 8 4 2 1 5 2-1 214 2 1 9 12 8 NFIB Small Business Economic Trends Quarterly Report PRICE PLANS Net Percent ( Higher Minus Lower ) in the Next Three Months 29 2 1 1 3 5 5 8 6 5 4 3 21 8 1 9 13 14 11 1 1 7 12 13 15 211 19 21 24 24 23 15 19 16 14 14 15 14 212 17 19 21 23 17 16 17 17 19 16 16 16 213 21 23 17 18 15 18 15 18 19 18 19 19 214 19 23 19 22
SMALL BUSINESS EMPLOYMENT ACTUAL EMPLOYMENT CHANGES Net Percent ( Increase Minus Decrease ) in the Last Three Months 29-15 -15-22 -25-24 -23-17 -16-16 -12-12 -12 21-1 -9-11 -12-12 -1-5 -2-3 -6-2 -1 211-4 -2-4 -6-3 -7-2 -2-5 2 1 212-2 -3-4 -5-3 1 2-3 1-1 -2 213 2-2 -2-2 -3-1 -1 4 3 2 4 214 2 2-1 -2 QUALIFIED APPLICANTS FOR JOB OPENINGS Percent Few or No Qualified Applicants 29 * * 24 24 25 27 26 23 25 25 28 21 21 24 26 23 26 26 25 28 32 3 28 27 28 211 28 3 29 32 3 33 31 33 34 31 35 34 212 31 31 32 34 37 33 38 37 41 38 36 33 213 34 34 36 38 38 41 4 42 41 4 44 38 214 38 4 41 41 Percent 4 3 2 1 EMPLOYMENT Planned Next Three Months and Current Job Openings January Quarter 1974 to April Quarter 214 Planned Job Openings -1 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14 9 NFIB Small Business Economic Trends Quarterly Report
SMALL BUSINESS EMPLOYMENT (CONTINUED) JOB OPENINGS Percent With Positions Not Able to Fill Right Now 29 11 11 1 9 9 11 9 8 8 8 8 1 21 1 11 9 11 9 9 1 11 11 1 9 13 211 13 15 15 14 12 15 12 15 14 14 16 15 212 18 17 15 17 2 15 15 18 17 16 17 16 213 18 21 18 18 19 19 2 19 2 21 23 23 214 22 22 22 24 HIRING PLANS Net Percent ( Increase Minus Decrease ) in the Next Three Months 29-6 -3-1 -5-5 -1-3 -4-1 -3-2 21-1 -1-2 -1 1 1 2 1-3 1 4 6 211 3 5 2 2-1 3 2 5 4 3 7 6 212 5 4 5 6 3 5 1 4 4 5 1 213 3 4 6 5 7 9 1 9 5 9 8 214 12 7 5 8 1 NFIB Small Business Economic Trends Quarterly Report Net Percent 4 35 3 25 2 15 1 5 SMALL BUSINESS COMPENSATION COMPENSATION Actual Last Three Months and Planned Next Three Months January 1986 to April 214 Planned Higher Actual Higher -5 86 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14
SMALL BUSINESS COMPENSATION (CONTINUED) ACTUAL COMPENSATION CHANGES Net Percent ( Increase Minus Decrease ) During Last Three Months 29 7 1-2 1 1 3 3 21 1-2 3 2 4 3 3 3 4 8 8 211 1 8 7 9 9 8 1 9 8 7 1 1 212 12 14 14 14 16 13 12 13 14 11 7 13 213 13 14 16 15 16 14 14 15 17 16 14 19 214 19 19 23 2 COMPENSATION PLANS Net Percent ( Increase Minus Decrease ) in the Next Three Months 29 3 3 2 1 3 4 3 3 5 1 1 21 1 6 3 5 4 3 5 6 3 5 5 3 211 5 7 9 7 7 7 6 7 7 8 9 5 212 6 12 9 9 9 7 8 1 1 9 4 5 213 7 8 9 9 9 6 11 12 13 1 14 13 214 11 14 14 14 Prices (Thick Line) PRICES AND LABOR COMPENSATION Net Percent Price Increase and Net Percent Compensation Increase 7 6 5 4 3 2 1-1 -2-3 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14 4 35 3 25 2 15 1 5 Labor Compensation (Thin Line) 11 NFIB Small Business Economic Trends Quarterly Report
SMALL BUSINESS CREDIT CONDITIONS Net Percent 4-4 -8-12 -16-2 -24-28 CREDIT CONDITIONS Loan Availability Compared to Three Months Ago* January Quarter 1974 to April Quarter 214-32 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14 * For the population borrowing at least once every three months. REGULAR BORROWERS Percent Borrowing at Least Once Every Three Months 29 35 36 33 33 34 3 33 32 33 33 33 33 21 32 34 35 31 32 29 32 31 33 31 28 3 211 31 31 29 32 29 29 3 32 31 3 34 31 212 32 32 31 32 32 29 31 3 31 3 3 29 213 31 29 3 31 29 29 31 28 3 28 29 3 214 31 3 31 3 12 NFIB Small Business Economic Trends Quarterly Report AVAILABILITY OF LOANS Net Percent ( Easier Minus Harder ) Compared to Three Months Ago (Regular Borrowers) 29-13 -13-12 -14-16 -14-15 -14-14 -14-15 -15 21-14 -12-15 -14-13 -13-13 -12-14 -11-11 -12 211-1 -11-8 -9-1 -9-1 -13-1 -11-1 -8 212-8 -8-11 -7-9 -7-7 -7-6 -7-9 -9 213-7 -7-4 -7-5 -6-6 -6-5 -6-6 -7 214-6 -8-8 -5
SMALL BUSINESS CREDIT CONDITIONS (CONTINUED) BORROWING NEEDS SATISFIED Percent of All Businesses Last Three Months Satisfied/ Percent of All Businesses Last Three Months Not Satisfied (Borrowers Only) 29 33/8 32/8 29/1 3/8 28/9 3/1 28/1 3/7 3/1 29/9 29/1 28/8 21 27/11 29/9 29/11 28/9 28/8 25/1 27/9 27/9 27/9 26/9 25/9 28/9 211 28/8 29/8 28/7 28/8 28/8 25/9 28/8 28/7 29/8 28/9 3/7 29/7 212 3/7 31/7 27/8 31/8 29/9 29/7 3/7 31/7 32/8 28/8 28/6 29/6 213 31/6 29/7 29/7 31/6 28/5 29/5 3/5 31/5 28/6 28/6 32/4 32/4 214 31/5 29/5 3/5 3/5 EXPECTED CREDIT CONDITIONS Net Percent ( Easier Minus Harder ) During Next Three Months (Regular Borrowers) 29-14 -16-14 -12-15 -13-14 -13-15 -16-15 -15 21-13 -14-16 -15-12 -13-14 -14-14 -12-1 -11 211-1 -1-9 -13-11 -1-11 -13-12 -11-1 -9 212-9 -1-11 -8-1 -8-7 -9-7 -8-1 -11 213-9 -8-6 -8-6 -7-8 -8-7 -8-7 -7 214-7 -7-7 -6 INTEREST RATES Relative Rates and Actual Rates Last Three Months January Quarter 1974 to April Quarter 214 13 NFIB Small Business Economic Trends Quarterly Report
SMALL BUSINESS CREDIT CONDITIONS (CONTINUED) RELATIVE INTEREST RATE PAID BY REGULAR BORROWERS* Net Percent ( Higher Minus Lower ) Compared to Three Months Ago 29-12 -9-1 -2 3 3 5 3 8 3 21 6 6 9 5 4 2 3 1 1 1 211 3 6 5 5 3 1 1-2 -1-3 212 1 2 3-1 -5-3 -2-1 2-2 213 2 3 1-1 -3 1 3 3 1 3 2 214 5 5 5 3 *Borrowing at Least Once Every Three Months. ACTUAL INTEREST RATE PAID ON SHORT-TERM LOANS BY BORROWERS Average Interest Rate Paid 29 6.4 6.2 6.2 6.1 6.3 6.5 6.5 6.1 6.1 6. 5.9 6.3 21 6.3 6. 6.8 6.4 6.5 6. 6.3 6.3 6.2 6. 5.7 6.2 211 6. 6. 5.9 6.5 6. 6. 5.9 6.1 6.1 6.2 5.7 6.2 212 6. 5.8 5.7 5.7 5.5 6.3 5.7 5.7 5.7 5.8 5.7 5.6 213 5.5 5.3 5.4 5.6 5.7 5.2 5.6 5.4 5.8 5.4 5.4 5.6 214 5.6 5.4 5.3 5.4 14 NFIB Small Business Economic Trends Quarterly Report Net Percent 15 1 5-5 -1-15 -2-25 SMALL BUSINESS INVENTORIES INVENTORIES Actual (Last Three Months) and Planned (Next Three Months) January Quarter 1974 to April Quarter 214 Actual Planned -3 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14
SMALL BUSINESS INVENTORIES (CONTINUED) ACTUAL INVENTORY CHANGES Net Percent ( Increase Minus Decrease ) During Last Three Months 29-18 -19-23 -27-27 -27-27 -24-24 -26-25 -28 21-21 -18-18 -18-2 -21-19 -15-14 -16-15 -13 211-1 -8-7 -9-13 -14-13 -9-11 -1-1 -1 212-7 -9-8 -8-7 -1-7 -8-8 -1-1 213-7 -9-6 -6-7 -7-1 -5-7 -6-7 -4 214-4 -2-6 -6 INVENTORY SATISFACTION Net Percent ( Too Low Minus Too Large ) at Present Time 29-6 -5-4 -5-2 -5-4 -4-3 -2-4 21-1 -1-1 1-1 -1-2 1-3 -3 211 2-1 1-1 -1 1-1 -1 212 1 2 3-1 -2 213-1 1-1 -1 1-2 -1-5 -4-5 214-2 -4-1 INVENTORY PLANS Net Percent ( Increase Minus Decrease ) in the Next Three to Six Months 29-1 -1-13 -7-3 -6-5 -7-6 -3-3 -8 21-4 -7-7 -2 2-3 -4-7 -3-4 -3 211-1 -2 1-1 -3-3 -3-5 -2 2 212-3 2 2-1 -1-1 -1-5 -4 213-7 -1-5 3-1 -1-2 -2-1 -2 214-3 -5 1 3 15 NFIB Small Business Economic Trends Quarterly Report
SMALL BUSINESS CAPITAL OUTLAYS INVENTORY SATISFACTION AND INVENTORY PLANS 15 Net Percent ( Too Low Minus Too Large ) at Present Time Net Percent Planning to Add Inventories in the Next Three to Six Months 1 5 Percent -5-1 -15 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14 Satisfaction Plans CAPITAL EXPENDITURES 8 Actual Last Six Months and Planned Next Three Months January Quarter 1974 to April Quarter 214 6 Percent 4 2 Actual Plans 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14 16 NFIB Small Business Economic Trends Quarterly Report ACTUAL CAPITAL EXPENDITURES Percent Making a Capital Expenditure During the Last Six Months 29 51 52 5 46 46 46 46 45 44 45 44 44 21 47 47 45 46 46 46 45 44 45 47 51 47 211 51 49 51 5 5 5 5 52 5 52 53 56 212 55 57 52 54 55 52 54 55 51 54 53 52 213 55 56 57 56 57 56 54 53 55 57 55 64 214 59 57 56 57
SMALL BUSINESS CAPITAL OUTLAYS (CONTINUED) TYPE OF CAPITAL EXPENDITURES MADE Percent Purchasing or Leasing During Last Six Months Type Current One Year Ago Two Years Ago Vehicles 23 22 22 Equipment 4 39 39 Furniture or Fixtures 14 12 13 Add. Bldgs. or Land 6 6 6 Improved Bldgs. or Land 13 14 13 AMOUNT OF CAPITAL EXPENDITURES MADE Percent Distribution of Per Firm Expenditures During the Last Six Months Amount Current One Year Ago Two Years Ago $1 to $999 4 4 3 $1, to $4,999 8 9 8 $5, to $9,999 7 6 5 $1, to $49,999 18 19 18 $5, to $99,999 7 7 7 $1, + 12 1 1 No Answer 1 1 3 CAPITAL EXPENDITURE PLANS Percent Planning a Capital Expenditure During Next Three to Six Months 29 19 18 16 19 2 17 18 16 18 17 16 18 21 2 2 19 19 2 19 18 16 19 18 2 21 211 22 22 24 21 2 21 2 21 2 21 24 24 212 24 23 22 25 24 21 21 24 21 22 19 2 213 21 25 25 23 23 23 23 24 25 23 24 26 214 24 25 24 25 17 NFIB Small Business Economic Trends Quarterly Report
SINGLE MOST IMPORTANT PROBLEM SINGLE MOST IMPORTANT PROBLEM April 214 Problem Current One Year Ago Survey High Survey Low Taxes 22 23 32 8 Inflation 5 5 41 Poor Sales 15 16 33 2 Fin. & Interest Rates 1 2 37 2 Cost of Labor 5 4 9 2 Govt. Reqs. & Red Tape 2 21 27 4 Comp. From Large Bus. 9 8 14 4 Quality of Labor 9 7 23 3 Cost/Avail. of Insurance 7 8 29 4 Other 7 6 31 2 4 SELECTED SINGLE MOST IMPORTANT PROBLEM Insurance, Big Business Competition, Inflation, and Regulation January Quarter 1974 to April Quarter 214 Big Business Insurance 3 Inflation Regulation Percent of Firms 2 1 18 NFIB Small Business Economic Trends Quarterly Report Percent of Firms 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14 4 3 2 1 SELECTED SINGLE MOST IMPORTANT PROBLEM Sales, Fin. & Interest Rates, Labor Cost, Labor Quality, and Taxes January Quarter 1974 to April Quarter 214 Taxes Interest Rates Sales Labor Quality 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 14
SURVEY PROFILE OWNER/MEMBERS PARTICIPATING IN ECONOMIC SURVEY NFIB Actual Number of Firms 29 213 846 867 1794 814 758 1994 882 827 259 825 83 21 2114 799 948 2176 823 84 229 874 849 191 87 84 211 2144 774 811 1985 733 766 1817 926 729 277 781 735 212 2155 819 757 1817 681 74 183 736 691 229 733 648 213 233 87 759 1873 715 662 1615 782 773 194 762 635 214 1864 792 685 1699 3 25 2 NFIB OWNER/MEMBERS PARTICIPATING IN ECONOMIC SURVEY Industry of Small Business Percent 15 1 5 Percent 3 25 2 15 1 5 NFIB OWNER/MEMBERS PARTICIPATING IN ECONOMIC SURVEY Number of Full and Part-Time Employees 19 NFIB Small Business Economic Trends Quarterly Report
NFIB RESEARCH FOUNDATION SMALL BUSINESS ECONOMIC SURVEY SMALL BUSINESS SURVEY QUESTIONS PAGE IN REPORT Do you think the next three months will be a good time for small business to expand substantially? Why?............... 4 About the economy in general, do you think that six months from now general business conditions will be better than they are now, about the same, or worse?............ 5 Were your net earnings or income (after taxes) from your business during the last calendar quarter higher, lower, or about the same as they were for the quarter before?............. 6 If higher or lower, what is the most important reason?............ 6 During the last calendar quarter, was your dollar sales volume higher, lower, or about the same as it was for the quarter before?.................................... 7 Overall, what do you expect to happen to real volume (number of units) of goods and/or services that you will sell during the next three months?......................... 7 How are your average selling prices compared to three months ago?.................................... 8 In the next three months, do you plan to change the average selling prices of your goods and/or services?............ 8 During the last three months, did the total number of employees in your firm increase, decrease, or stay about the same?.......... 9 2 NFIB Small Business Economic Trends Quarterly Report If you have filled or attempted to fill any job openings in the past three months, how many qualified applicants were there for the position(s)?............................ 9 Do you have any job openings that you are not able to fill right now?..................................... 1 In the next three months, do you expect to increase or decrease the total number of people working for you?........... 1 Over the past three months, did you change the average employee compensation?............................... 11 Do you plan to change average employee compensation during the next three months?........................... 11
SMALL BUSINESS SURVEY QUESTIONS PAGE IN REPORT Are loans easier or harder to get than they were three months ago?....................................... 12 During the last three months, was your firm able to satisfy its borrowing needs?............................... 13 Do you expect to find it easier or harder to obtain your required financing during the next three months?............. 13 If you borrow money regularly (at least once every three months) as part of your business activity, how does the rate of interest payable on your most recent loan compare with that paid three months ago?........................... 14 If you borrowed within the last three months for business purposes, and the loan maturity (pay back period) was 1 year or less, what interest rate did you pay?.................. 14 During the last three months, did you increase or decrease your inventories?......................................... 15 At the present time, do you feel your inventories are too large, about right, or inadequate?.......................... 15 Looking ahead to the next three months to six months, do you expect, on balance, to add to your inventories, keep them about the same, or decrease them?............... 15 During the last six months, has your firm made any capital expenditures to improve or purchase equipment, buildings, or land?............................................... 16 If [your firm made any capital expenditures], what was the total cost of all these projects?........................ 17 Looking ahead to the next three to six months, do you expect to make any capital expenditures for plant and/or physical equipment?.............................. 17 What is the single most important problem facing your business today?........................................ 18 Please classify your major business activity, using one of the categories of example below........................ 19 How many employees do you have full and part-time, including yourself?..................................... 19 21 NFIB Small Business Economic Trends Monthly Report