NFIB SMALL BUSINESS ECONOMIC TRENDS William C. Dunkelberg Holly Wad October 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 9% - 1 * Plans to Make Capital Outlays 22% - 5 * Plans to Increase Inventories 2% 1 * Expect Economy to Improve - 2% 1 * Expect Real Sales Higher 5% - 1 * Current Inventory % 2 * Current Job Openings 21% - 5 * Expected Credit Conditions - 7% - 2 * Now a Good Time to Expand 13% 4 * Earnings Trends - 19% - 2 * Total Change - 8 * (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 September s Optimism Index gave up.8 points, falling to 95.3. At 95.3, the Index is now 5 points below the pre-recession average (from 1973 to 27). Four Index components improved, six declined. Two declined by 1 points total, accounting for the entire decline in the Index score. Unfortunately, the two that fell drastically were job openings and planned capital outlays, which are directly relevant to GDP growth and hiring. LABOR MARKETS NFIB owners increased employment by an average of.24 workers per firm in September (seasonally adjusted), the 12th positive month in a row and the largest gain this year. Fifty percent of the owners hired or tried to hire in the last three months and 42 percent reported few or no qualified applicants for open positions. Twenty-one percent of all owners reported job openings they could not fill in the current period, down 5 points, not a good sign for improvements in the unemployment rate. Fifteen percent reported using temporary workers, down 1 point. Job creation plans faded, suggesting weaker job creation ahead. The net percent of owners planning to increase employment fell 1 point to a seasonally adjusted net 9 percent, after a 3 point decline in August. INVENTORIES AND SALES The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past 3 months compared to the prior 3 months deteriorated 2 points to a net negative 4 percent. Fourteen percent cited weak sales as their top business problem, one of the lowest readings since December 27, but up 1 point from August. Expected real sales volumes posted a 1 point decline, falling to a net 5 percent of owners expecting gains after dropping 4 points in August. Overall, these readings are more like a recession period than one of expansion. The pace of inventory reduction accelerated, with a net negative 7 percent of all owners reporting growth in inventories (seasonally adjusted). Clearly firms are liquidating stocks faster than adding to them. With sales trends weakening, the reductions in inventories are not surprising. The net percent of owners viewing current inventory stocks as too low improved a point to a net negative percent, a very balanced reading. Sales trends continued to deteriorate a bit but remained near the best levels in the recovery, just historically weak. Expected real sales did not improve, and this contributed to less urgency to rebuild stocks. The net percent of owners planning to add to inventory stocks rose 1 point to a net 2 percent. While inventory accumulation can add to GDP growth, there isn t much juice in the small business sector to contribute. This survey was conducted in September 214. A sample of 3,938 small-business owners/members was drawn. Six hundred and eight (68) usable responses were received a response rate of 15 percent. 1 NFIB Small Business Economic Trends Monthly Report
CAPITAL SPENDING The percent of owners planning capital outlays in the next 3 to 6 months fell 5 points to 22, an unfortunate reversal for this important measure. Inconsistent with this decline was a 4 point rise in the percent of owners viewing the current period as a good time to expand substantially, the best reading since December 27, the peak of the last expansion. Fifty-six percent reported outlays, down 2 points from August, not a very encouraging reading. Of those making expenditures, 38 percent reported spending on new equipment (down 4 points), 23 percent acquired vehicles (up 1 point), and 12 percent improved or expanded facilities (down 2 points). Five percent acquired new buildings or land for expansion (down 2 points) and 9 percent spent money for new fixtures and furniture (down 2 points). Overall, spending remains in replacement mode, not a lot of expansion except in selected markets including Texas and North Dakota. INFLATION Seasonally adjusted, the net percent of owners raising selling prices was a net 4 percent, down 2 points after a surprising 8 percentage point decline in August. Seasonally adjusted, a net 16 percent plan price hikes (down 3 points). These developments are good news to the Federal Reserve, making them more comfortable providing accommodation even though there isn t much evidence to support the notion that buying bonds is helping the employment picture or creating the desired inflation. 2 NFIB Small Business Economic Trends Monthly Report EARNINGS AND WAGES Earnings trends deteriorated 2 points, reaching a net negative 19 percent. Sales are not improving substantially and labor costs continue to put pressure on the bottom line. Benefit increases induced by the healthcare laws raise labor costs but contribute little to take home pay. A seasonally adjusted net 18 percent reporting higher compensation, down 4 points, reversing a positive compensation trend. A net seasonally adjusted 15 percent plan to raise compensation in the coming months (unchanged). The reported gains in compensation are still in the range typical of an economy with reasonable growth, but the reversal was disappointing (for employees) as it signals weaker labor demand and soft labor markets. CREDIT MARKETS Six percent of the owners reported that all their credit needs were not met, up 2 points from the historic low. Twenty-eight percent reported all credit needs met, and 51 percent explicitly said they did not want a loan. Only 2 percent reported that financing was their top business problem compared to 21 percent citing taxes, 22 percent citing regulations and red tape and 14 percent citing weak sales. The net percent of owners expecting credit conditions to ease in the coming months was a seasonally adjusted negative 7 percent, 2 points worse than August. Interest rates are low, but prospects for putting borrowed money profitably to work are not great and so loan demand remains weak among small business owners. Low rates have not triggered the growth in spending that would promise a good cash flow on business investments.
COMMENTARY Pundits report that the Federal Reserve is planning to raise interest rates, probably around mid-215. But, the message some observers get is a bit different. Federal Reserve officials have made it very clear that any decision to raise rates, or allow the market to work, is data dependent. The premise that rates will rise in 215 is spun off of the economic forecasts of the Fed governors and regional presidents. Their forecasts have been persistently optimistic. If their forecasts are correct, rates can go up, but if their forecasts turn out to be too optimistic, will rates still be allowed to rise? Recent speeches by Federal Reserve officials have emphasized the slack in labor markets and the consequent need for accommodation, the code word for buying bonds to keep interest rates low. This in spite of the evidence that indicates the low rates are not stimulating the hoped-for spending and hiring but causing many other distortions. An official end to QE3 does not preclude the Federal Reserve from buying bonds through normal Open Market Operations in the conduct of monetary policy. The Federal Reserve has not been able to attain its goal of 2 percent inflation or its unspecified goals for employment (the unemployment rate was quickly disposed of as a target measure). This obviously creates much uncertainty, not just in financial markets but on Main Street as well. Seeing the Federal Reserve trying to create the very thing they were designed to minimize is a bit disconcerting. With historically low interest rates, why has the percent of small business owners indicating no interest in borrowing reached record high levels? The answer is obvious except to policymakers in Washington, D.C. Borrowed money must be repaid with interest and few business owners see opportunities to make profitable investments in facilities, equipment or employees. There is too much uncertainty, expectations for improved sales are weak, the economy is not expected to improve substantially and there is little hope that the top concerns of business owners will be addressed in Washington, D.C. While Gross Domestic Product (GPD) growth has been positive, Gross Domestic Expenditures have only recently shown some strength. The difference between GDP and Gross Domestic Expenditures, is exports, the life blood of the performance from large companies. As domestic spending picks up, the small business sector will contribute more to growth and employment. Less clear is what will trigger the improvement in domestic spending. More bond buying will not, it will probably take very positive news from Washington dealing with taxes and regulations to improve the mood of consumers and small business owners. Only 1 in 1 consumers thinks government policy is good. This will have to improve before the private sector picks up speed. 3 NFIB Small Business Economic Trends Monthly Report
OVERVIEW - SMALL BUSINESS OPTIMISM OPTIMISM INDEX Based on Ten Survey Indicators (Seasonally Adjusted 1986=1) 11 Index Value (1986=1) 1 9 8 86 88 9 92 94 96 98 2 4 6 8 1 12 14 OPTIMISM INDEX Based on Ten Survey Indicators (Seasonally Adjusted 1986=1) 29 84.1 82.6 81. 86.8 88.9 87.9 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 96.6 95. 95.7 96.1 95.3 SMALL BUSINESS OUTLOOK 4 NFIB Small Business Economic Trends Monthly Report Percent "Good Time to Expand" (thick line) 3 2 1 OUTLOOK Good Time to Expand and Expected General Business Conditions January 1986 to September 214 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 1 7 1 9 13 MOST IMPORTANT REASON FOR EXPANSION OUTLOOK Reason Percent by Expansion Outlook September 214 Reason Good Time Not Good Time Uncertain Economic Conditions 4 27 14 Sales Prospects 5 5 3 Fin. & Interest Rates 1 Cost of Expansion 3 3 Political Climate 1 14 1 Other/Not Available 2 6 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 -9-1 -6-3 -2 5 NFIB Small Business Economic Trends Monthly Report
SMALL BUSINESS EARNINGS EARNINGS Actual Last Three Months January 1986 to September 214-1 Net Percent -2-3 -4-5 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 -2-17 -18-18 -17-19 6 NFIB Small Business Economic Trends Monthly Report MOST IMPORTANT REASON FOR LOWER EARNINGS Percent Reason September 214 Current Month One Year Ago Two Years Ago Sales Volume 13 15 18 Increased Costs* 11 12 9 Cut Selling Prices 4 2 3 Usual Seasonal Change 4 3 4 Other 3 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 (Next Three Months) January 1986 to September 214-4 86 88 9 92 94 96 98 2 4 6 8 1 12 14 Expected Actual 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 -2-1 -2-3 -2-4 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 15 11 1 6 5 7 NFIB Small Business Economic Trends Monthly Report
SMALL BUSINESS PRICES PRICES Actual Last Three Months and Planned Next Three Months January 1986 to September 214 4 Net Percent of Firms 3 2 1-1 Planned -2 Actual -3 86 88 9 92 94 96 98 2 4 6 8 1 12 14 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 12 14 14 6 4 8 NFIB Small Business Economic Trends Monthly 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 21 21 22 19 16
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 -2-1 -1 3 4 3 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 46 43 42 46 42 Percent 4 3 2 1 EMPLOYMENT Planned Next Three Months and Current Job Openings January 1986 to September 214 Planned Job Openings -1 86 88 9 92 94 96 98 2 4 6 8 1 12 14 9 NFIB Small Business Economic Trends Monthly 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 24 26 24 26 21 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 12 13 1 9 1 NFIB Small Business Economic Trends Monthly 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 September 214 Planned Higher Actual Higher -5 86 88 9 92 94 96 98 2 4 6 8 1 12 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 2 21 21 22 18 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 15 13 14 15 15 4 3 2 1-1 -2 PRICES AND LABOR COMPENSATION Net Percent Price Increase and Net Percent Compensation Actual Prices Actual Compensation -3 86 88 9 92 94 96 98 2 4 6 8 1 12 14 11 NFIB Small Business Economic Trends Monthly Report
SMALL BUSINESS CREDIT CONDITIONS Net Percent of Firms CREDIT CONDITIONS Loan Availability Compared to Three Months Ago* January 1986 to September 214 2-2 -4-6 -8-1 -12-14 -16-18 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 31 28 3 29 31 12 NFIB Small Business Economic Trends Monthly 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 -5-6 -6-5 -5-7
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 (All Borrowers) 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 3/5 27/6 3/6 28/4 28/6 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 -6-7 -7-5 -5-7 Avg. Short-term Rate (thick line) 13 11 9 7 INTEREST RATES Relative Rates and Actual Rates Last Three Months January 1986 to September 214 5 86 88 9 92 94 96 98 2 4 6 8 1 12 14 4 2-2 -4 Rate Relative (thin line) 13 NFIB Small Business Economic Trends Monthly 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 1-1 2 2 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 6.3 5.9 212 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 5.7 5.7 5.4 5.3 5.4 14 NFIB Small Business Economic Trends Monthly 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 1986 to September 214 Actual Planned -3 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 -6-4 -4-3 -2-7 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 -2-2 -3-2 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 1-1 1 2 15 NFIB Small Business Economic Trends Monthly Report
SMALL BUSINESS CAPITAL OUTLAYS INVENTORY SATISFACTION AND INVENTORY PLANS Net Percent ( Too Low Minus Too Large ) at Present Time Net Percent Planning to Add Inventories in the Next Three to Six Months 15 1 5 Percent -5-1 Inventory Plans Inventory Satisfaction -15 86 88 9 92 94 96 98 2 4 6 8 1 12 14 75 65 CAPITAL EXPENDITURES Actual Last Six Months and Planned Next Three Months January 1986 to September 214 Percent 55 45 35 25 Actual Planned 15 86 88 9 92 94 96 98 2 4 6 8 1 12 14 16 NFIB Small Business Economic Trends Monthly 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 55 54 55 58 56
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 2 16 Equipment 38 39 34 Furniture or Fixtures 9 12 12 Add. Bldgs. or Land 5 5 4 Improved Bldgs. or Land 12 13 14 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 3 4 4 $1, to $4,999 8 8 7 $5, to $9,999 5 8 5 $1, to $49,999 21 19 19 $5, to $99,999 8 8 6 $1, + 11 1 9 No Answer 1 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 24 22 23 27 22 17 NFIB Small Business Economic Trends Monthly Report
SINGLE MOST IMPORTANT PROBLEM Problem SINGLE MOST IMPORTANT PROBLEM September 214 Current One Year Ago Survey High Survey Low Taxes 21 18 32 8 Inflation 3 5 41 Poor Sales 14 17 34 2 Fin. & Interest Rates 2 2 37 1 Cost of Labor 4 4 9 2 Govt. Reqs. & Red Tape 22 24 27 4 Comp. From Large Bus. 8 5 14 4 Quality of Labor 9 1 24 3 Cost/Avail. of Insurance 9 8 29 4 Other 8 7 31 1 Percent of Firms 4 3 2 1 SELECTED SINGLE MOST IMPORTANT PROBLEM Inflation, Big Business, Insurance and Regulation January 1986 to September 214 Big Business Inflation Insurance Regulation 86 88 9 92 94 96 98 2 4 6 8 1 12 14 18 NFIB Small Business Economic Trends Monthly Report Percent of Firms 4 3 2 1 SELECTED SINGLE MOST IMPORTANT PROBLEM Taxes, Interest Rates, Sales and Labor Quality January 1986 to September 214 Taxes Interest Rates & Finance Sales Labor Quality 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 678 672 1645 598 68 Percent 25 2 15 1 5 NFIB OWNER/MEMBERS PARTICIPATING IN ECONOMIC SURVEY Industry of Small Business 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 Monthly 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 Monthly 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