NFIB SMALL BUSINESS ECONOMIC TRENDS William C. Dunkelberg Holly Wade February 216 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 1% -1 * Plans to Make Capital Outlays 23% -2 * Plans to Increase Inventories -1% * Expect Economy to Improve -21% * Expect Real Sales Higher % -3 * Current Inventory -2% * Current Job Openings 28% -1 * Expected Credit Conditions -7% * Now a Good Time to Expand 8% -2 * Earnings Trends -21% -3 * Total Change -12 * (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 Director of Research and Policy Analysis 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
1 NFIB Small Business Economic Trends Monthly Report SUMMARY OPTIMISM INDEX The Index of Small Business Optimism fell 1 point from January, falling to 92.9. None of the 1 Index components posted a gain, six posted small declines, and four were unchanged. Overall, a ho hum outcome, confirming that the small business sector is not headed up with any strength, just treading water waiting for a good reason to invest in the future. Spending and hiring plans weakened a bit as expectations for growth in real sales volumes fell. Earnings trends worsened a bit as owners continued to report widespread gains in worker compensation while holding the line on price increases. The political climate continued to be the second most frequently cited reason for the current period being a bad time to expand. LABOR MARKETS Reported job creation reversed in February, with an average employment change per firm falling to a decline in employment of -.12 workers per firm. The employment question looks back over the prior three months, likely reflecting some of the poor GDP performance in the fourth quarter. Forty-nine percent reported hiring or trying to hire (down 3 points), but 42 percent reported few or no qualified applicants for the positions they were trying to fill. The percent of owners citing the difficulty of finding qualified workers as their Single Most Important Business Problem fell 3 points to 12 percent. Twenty-eight percent of all owners reported job openings they could not fill in the current period, down 1 point from the highest level for this expansion. Ten percent reported using temporary workers, down 4 points. A seasonally adjusted net 1 percent plan to create new jobs, down 1 point from January, 5 points from December. 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 improved 1 point, rising to a net negative 6 percent on the back of a solid January consumer spending number. Eleven percent cited weak sales as their top business problem, down 1 point. Overall, this is not a strong sales picture. Expected real sales volumes posted a 3 point loss, falling to a seasonally adjusted net percent of owners expecting gains. This is well below the average 14 point reading in the first three months of 215. Owners aren t expecting a very energetic opening to the year. The net percent of owners reporting inventory increases was a net negative 3 percent (seasonally adjusted), a 1 point deterioration. The net percent of owners viewing current inventory stocks as too low was unchanged at a net negative 2 percent. The net percent of owners planning to add to inventory was unchanged at a net negative 1 percent. With weak expectations for sales and business conditions, owners see no need to add to current stocks. This survey was conducted in February 216. A sample of 5, small-business owners/members was drawn. Seven hundred and fifty-six (756) usable responses were received a response rate of 15 percent.
2 NFIB Small Business Economic Trends Monthly Report CAPITAL SPENDING Fifty-eight percent reported capital outlays, down 3 points. Overall, capital spending weakened again in February. The percent of owners planning capital outlays in the next 3 to 6 months fell 2 points to 23 percent. Clearly, expectations for the economy are not conducive to an improvement in business investment. INFLATION Nineteen percent of the NFIB owners reported reducing their average selling prices in the past three months (up 1 point), and 15 percent reported price increases (up 2 points). Seasonally adjusted, the net percent of owners raising selling prices was negative 4 percent, unchanged from January. Obviously more evidence that the Fed s policies aimed at producing inflation are not working. A recovery in spending is the only way to create inflation, with spending demands pressing against short run supply. Zero or negative interest rates are not the answer, creating fear and uncertainty among owners rather than stimulating spending. Nineteen percent plan on raising average prices in the next few months while only 3 percent plan reductions (down 1 point), far fewer than actually report reductions. Seasonally adjusted, a net 14 percent plan price hikes (down 2 points). EARNINGS AND WAGES A seasonally adjusted net 22 percent of owners reported raising worker compensation, down 5 points from the expansion high level reached in January. The net percent planning to increase compensation fell 3 points to a net 12 percent. Clearly owners are not passing these costs on through higher prices. Perhaps energy savings are providing some cushion for the adverse impact of higher compensation on the bottom line. Earnings trends worsened 3 points to a negative 21 percent reporting quarter on quarter profit improvements. Far more owners are reporting profits lower quarter to quarter than higher. CREDIT MARKETS Four percent of owners reported that all their borrowing needs were not satisfied, 2 points above the record low reached in September 215. Thirtyone percent reported all credit needs met (down 4 points), and 52 percent explicitly said they did not want a loan. Thirty-one percent of all owners reported borrowing on a regular basis, down 2 points. The average rate paid on short maturity loans fell 1 basis points to 5.3 percent. Loan demand remains historically weak, owners can t find many good reasons to borrow to invest when expectations for growth are not very positive. The net percent of owners expecting credit conditions to ease in the coming months was a negative 7 percent, unchanged. Interest rates are low, but prospects for putting borrowed money profitably to work have not improved enough to induce owners to step up their borrowing and spending. With a quarter of all owners expecting business conditions to deteriorate, prospects for an improvement in loan demand are low.
3 NFIB Small Business Economic Trends Monthly Report COMMENTARY New York Federal Reserve President William Dudley continued to reinforce the perception that the Federal Reserve has become preoccupied with short term financial market behavior: "At this moment, I judge that the balance of risks to my growth and inflation outlooks may be starting to tilt slightly to the downside," he said at a conference in Hangzhou, China. "On balance, I am somewhat less confident than I was before." Ignoring a well-established principle that the policy lags are long and variable, the Fed refuses to make clear its longer term view about the economy, design a compatible policy and pursue it regardless of monthly variations in economic statistics which are subject to considerable revision. Monthly management of monetary policy using data subject to substantial revision is inconsistent with the acknowledged lags in policy and not supportive of real growth which requires more policy consistency. Financial markets of course thrive on the variability such policies produce and support a zero interest-rate policy (ZIRP). Meanwhile, compared to 29, consumer interest income is down cumulatively over $3 trillion dollars, an unhappy side effect of Fed policies. Low interest rates are great if they occur in an economy that presents investment opportunities. This happens when the economy is exhibiting solid growth which it has not done in this expansion. The 1983 expansion averaged 65, new jobs each quarter compared to 45, in this expansion with a labor force 3 percent larger. NFIB data indicate slow growth in the first quarter following the 1 percent growth rate for the fourth quarter of 215. The GDPNow forecast from the Atlanta Fed is about 2 percent and the NFIB data basically agree. Owners are very pessimistic about business conditions in the coming months and spending and hiring plans have softened. Political uncertainty remains a major concern and the President does not seem inclined to act favorably on any small business owner s major concerns. Fed policy communications are very disconcerting, giving an impression that the economy is weak. Too much monthly dithering. All of this generates uncertainty, the enemy of spending and hiring behavior that would move the economy forward at a faster pace.
4 NFIB Small Business Economic Trends Monthly Report Percent "Good Time to Expand" (thick line) Percent "Better" Minus "Worse" Expected General Business Conditions (thin line) 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) 211 93.9 94.7 92.4 9.9 9.5 91.2 9.2 87.9 88.9 9.2 91.8 93.7 212 93.7 94.5 93.1 94.2 94. 91.9 91.5 92.7 92.7 93. 87.2 88. 213 88.8 9.9 9. 91.7 94. 94. 94.4 94. 93.8 91.5 92.2 93.8 214 94. 91.6 94. 94.8 96.2 95.4 96. 95.9 95.3 96. 97.8 1.3 215 97.7 98.1 95.7 96.5 97.9 94.6 95.7 95.7 96. 96. 94.5 95.2 216 93.9 92.9 SMALL BUSINESS OUTLOOK OUTLOOK Good Time to Expand and Expected General Business Conditions January 1986 to February 216 3 8 6 2 4 2 1-2 86 88 9 92 94 96 98 2 4 6 8 1 12 14-4
5 NFIB Small Business Economic Trends Monthly Report SMALL BUSINESS OUTLOOK (CONTINUED) OUTLOOK FOR EXPANSION Percent Next Three Months Good Time to Expand 211 8 7 6 5 5 5 6 6 5 7 8 9 212 9 8 8 8 7 6 5 5 6 7 6 7 213 6 5 5 5 8 8 9 7 7 6 9 9 214 8 6 9 9 1 8 1 1 12 11 11 15 215 13 13 11 11 14 1 12 11 11 13 12 8 216 1 8 MOST IMPORTANT REASON FOR EXPANSION OUTLOOK Reason Percent by Expansion Outlook February 216 Reason Good Time Not Good Time Uncertain Economic Conditions 4 31 16 Sales Prospects 4 6 3 Fin. & Interest Rates 1 1 Cost of Expansion 4 3 Political Climate 12 9 Other/Not Available 2 4 OUTLOOK FOR GENERAL BUSINESS CONDITIONS Net Percent ( Better Minus Worse ) Six Months From Now 211 1 12-7 -6-1 -14-28 -24-18 -15-9 212-3 -3-3 -4-3 -9-7 -4-38 -36 213-3 -25-23 -14-6 -3-5 -4-12 -19-23 -12 214-11 -16-13 -8-1 -9-5 -5-4 -5 1 12 215 2-2 -5-4 -8-3 -8-6 -6-1 -15 216-21 -21
6 NFIB Small Business Economic Trends Monthly Report SMALL BUSINESS EARNINGS EARNINGS Actual Last Three Months January 1986 to February 216-1 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 211-26 -26-31 -27-26 -24-24 -27-27 -28-28 -21 212-22 -18-22 -13-17 -22-27 -29-27 -28-32 -28 213-24 -25-22 -24-24 -23-22 -22-23 -25-24 -21 214-25 -26-23 -21-19 -18-18 -18-19 -22-17 -14 215-17 -18-21 -17-9 -17-19 -16-13 -18-19 -17 216-18 -21 MOST IMPORTANT REASON FOR LOWER EARNINGS Percent Reason February 215 Current Month One Year Ago Two Years Ago Sales Volume 15 13 19 Increased Costs* 8 9 11 Cut Selling Prices 5 4 3 Usual Seasonal Change 7 9 7 Other 4 4 4 * Increased costs include labor, materials, finance, taxes, and regulatory costs.
7 NFIB Small Business Economic Trends Monthly Report SMALL BUSINESS SALES Net Percent 5 4 3 2 1-1 SALES Actual (Prior Three Months) and Expected (Next Three Months) January 1986 to February 216-2 Expected -3 Actual -4 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 211-1 -9-12 -7-11 -7-8 -1-1 -11-1 -7 212-5 -5 1 2-5 -9-14 -13-14 -14-1 213-8 -7-7 -6-6 -8-7 -7-6 -7-7 -8 214-9 -6-6 -4-3 -2-3 -3-4 -2-3 2 215-2 -4-3 -6 5-6 -6-4 -1-7 -4-5 216-7 -6 SALES EXPECTATIONS Net Percent ( Higher Minus Lower ) During Next Three Months 211 11 13 7 4 3 1-2 -12-5 -2 4 8 212 8 11 9 5 2-2 -4 2 2 5-5 -3 213-3 -3 3 8 6 8 6 9 4 3 7 214 13 2 13 9 15 12 11 7 6 11 14 19 215 14 14 14 9 7 5 7 8 2 6-1 7 216 3
8 NFIB Small Business Economic Trends Monthly Report SMALL BUSINESS PRICES 4 PRICES Actual Last Three Months and Planned Next Three Months January 1986 to February 216 Net Percent of Firms 3 2 1-1 -2 Planned 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 211-1 8 9 11 13 7 5 1 6-2 1 3 212 2 4 6 7 1 6 9 6 4 1 3 213 5 5-1 2 5 2 2 1 4 3 2 214 5 4 9 11 1 11 12 6 4 7 5 7 215 6 3 2 1 4 2 3 1 1 1 4-1 216-4 -4 PRICE PLANS Net Percent ( Higher Minus Lower ) in the Next Three Months 211 19 2 24 23 23 15 19 16 15 15 16 14 212 17 18 21 22 17 16 17 17 2 17 17 16 213 21 22 17 17 15 18 15 18 2 19 2 19 214 19 22 19 21 21 21 22 19 17 21 2 22 215 19 18 15 16 17 18 17 15 14 15 18 2 216 16 14
Percent 9 NFIB Small Business Economic Trends Monthly Report SMALL BUSINESS EMPLOYMENT ACTUAL EMPLOYMENT CHANGES Net Percent ( Increase Minus Decrease ) in the Last Three Months 211-4 -3-1 -2-1 -5-4 -6-5 -2 1-1 212-3 -3-1 -1-2 -3-1 -2-4 213 2-3 1 2-1 1-3 1 1 2 214 2 2 2 2 1 1 1 3 1 1 7 215 5 4 2 2 4 6 5-1 216 1-3 QUALIFIED APPLICANTS FOR JOB OPENINGS Percent Few or No Qualified Applicants 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 45 45 43 215 42 47 42 44 47 44 48 48 45 48 47 48 216 45 42 4 EMPLOYMENT Planned Next Three Months and Current Job Openings January 1986 to February 216 3 2 1 Planned Job Openings -1 86 88 9 92 94 96 98 2 4 6 8 1 12 14 16
1 NFIB Small Business Economic Trends Monthly Report Net Percent SMALL BUSINESS EMPLOYMENT (CONTINUED) JOB OPENINGS Percent With Positions Not Able to Fill Right Now 211 13 15 15 14 12 15 12 14 14 14 17 15 212 18 17 15 17 2 15 15 17 17 16 18 16 213 18 21 18 18 19 19 2 18 2 21 24 23 214 22 22 22 24 24 26 24 25 21 24 25 25 215 26 29 24 27 29 24 25 28 27 27 28 28 216 29 28 HIRING PLANS Net Percent ( Increase Minus Decrease ) in the Next Three Months 211 2 5 4 2 3 2 3 4 3 7 6 212 4 4 2 5 7 3 5 8 4 4 5 1 213 2 4 2 6 6 7 9 8 9 5 9 8 214 11 7 7 8 11 12 13 8 9 1 11 15 215 13 12 12 11 13 9 12 11 12 11 11 15 216 11 1 SMALL BUSINESS COMPENSATION 4 35 3 25 2 15 1 5 COMPENSATION Actual Last Three Months and Planned Next Three Months January 1986 to February 216 Planned Actual -5 86 88 9 92 94 96 98 2 4 6 8 1 12 14
11 NFIB Small Business Economic Trends Monthly Report SMALL BUSINESS COMPENSATION (CONTINUED) ACTUAL COMPENSATION CHANGES Net Percent ( Increase Minus Decrease ) During Last Three Months 211 1 8 7 9 9 8 1 9 8 8 11 9 212 12 14 14 14 16 13 12 13 14 12 8 12 213 13 14 16 15 16 14 14 15 17 17 15 18 214 19 19 23 2 2 21 21 22 18 2 22 24 215 25 2 22 23 25 21 23 23 23 22 24 22 216 27 22 COMPENSATION PLANS Net Percent ( Increase Minus Decrease ) in the Next Three Months 211 6 7 9 7 7 8 6 6 7 8 8 6 212 7 12 9 9 9 8 8 9 1 9 3 6 213 8 8 9 9 9 7 11 11 13 1 13 14 214 12 14 14 14 15 14 14 14 15 13 14 18 215 13 14 13 14 14 12 15 12 16 17 19 21 216 15 12 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 16
12 NFIB Small Business Economic Trends Monthly Report SMALL BUSINESS CREDIT CONDITIONS Net Percent of Firms 2-2 -4-6 -8-1 -12-14 -16 CREDIT CONDITIONS Loan Availability Compared to Three Months Ago* January 1986 to February 216-18 86 88 9 92 94 96 98 2 4 6 8 1 12 14 16 * For the population borrowing at least once every three months. REGULAR BORROWERS Percent Borrowing at Least Once Every Three Months 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 28 33 31 215 33 3 32 3 29 31 3 33 29 28 27 31 216 33 31 AVAILABILITY OF LOANS Net Percent ( Easier Minus Harder ) Compared to Three Months Ago (Regular Borrowers) 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 -4-5 -3 215-4 -3-5 -4-3 -4-4 -4-4 -3-4 -5 216-5 -5
Avg. Short-term Rate (thick line) Rate Relative (thin line) 13 NFIB Small Business Economic Trends Monthly Report 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) 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 29/4 29/4 32/4 215 32/4 33/3 35/5 31/4 3/4 32/5 32/4 33/3 3/2 3/3 32/3 32/4 216 35/3 31/4 EXPECTED CREDIT CONDITIONS Net Percent ( Easier Minus Harder ) During Next Three Months (Regular Borrowers) 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 -5-6 -5 215-5 -4-6 -4-4 -4-5 -7-6 -5-4 -6 216-7 -7 INTEREST RATES Relative Rates and Actual Rates Last Three Months January 1986 to February 216 13 4 11 9 2 7-2 5-4 86 88 9 92 94 96 98 2 4 6 8 1 12 14 16
14 NFIB Small Business Economic Trends Monthly Report Net Percent SMALL BUSINESS CREDIT CONDITIONS (CONTINUED) RELATIVE INTEREST RATE PAID BY REGULAR BORROWERS Net Percent ( Higher Minus Lower ) Compared to Three Months Ago 211 2 4 2 4 4 3 1 1 2-1 -2 212-1 -2-2 -2 1 1-1 213-1 2 3 4 2 2 3 214 4 3 2 2 2 2 1 2 3-1 215 2 1 1 1 2 1 2-1 2 2 216 7 6 Borrowing at Least Once Every Three Months. ACTUAL INTEREST RATE PAID ON SHORT-TERM LOANS BY BORROWERS Average Interest Rate Paid 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 5.5 5.6 5.1 215 5.3 5.1 5.7 5. 4.8 5. 5.2 5.4 4.8 5.1 4.7 5. 216 5.4 5.3 15 1 5-5 -1-15 -2-25 SMALL BUSINESS INVENTORIES INVENTORIES Actual (Last Three Months) and Planned (Next Three Months) January 1986 to February 216 Actual Planned -3 86 88 9 92 94 96 98 2 4 6 8 1 12 14 16
15 NFIB Small Business Economic Trends Monthly Report SMALL BUSINESS INVENTORIES (CONTINUED) ACTUAL INVENTORY CHANGES Net Percent ( Increase Minus Decrease ) During Last Three Months 211-1 -9-8 -9-12 -14-12 -1-11 -1-11 -9 212-7 -1-1 -8-7 -7-9 -8-8 -8-11 -9 213-7 -1-7 -6-6 -7-9 -6-7 -6-8 -3 214-4 -3-7 -6-3 -4-2 -3-7 -1 1 1 215 2 1-5 -1-4 2-2 -2-4 216-2 -3 INVENTORY SATISFACTION Net Percent ( Too Low Minus Too Large ) at Present Time 211 2-3 -2-1 1-1 2 212 1 2 2-1 -1-1 -1 2 213-1 1-3 -3 1-2 -1-5 -3-4 214-2 -5-2 -2-3 -2-3 -2-3 -2-2 215-1 -3-7 -2-1 -4-6 -6-5 -4-5 -4 216-2 -2 INVENTORY PLANS Net Percent ( Increase Minus Decrease ) in the Next Three to Six Months 211-2 1-2 -4-3 -3-4 -2-1 3 212-2 3-1 1 1-1 -1-1 -6-4 213-6 -1-5 -1 2-1 -1-1 -2-1 -1-2 214-2 -5 1 2-1 2 2 3 1 6 215 3 5 1 3 3-4 2 3-1 1 216-1 -1
16 NFIB Small Business Economic Trends Monthly Report SMALL BUSINESS CAPITAL OUTLAYS 15 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 1 5 Percent -5-1 Plans Satisfaction -15 86 88 9 92 94 96 98 2 4 6 8 1 12 14 16 CAPITAL EXPENDITURES Actual Last Six Months and Planned Next Three Months January 1986 to February 216 75 65 Percent 55 45 35 25 Actual Expected 15 86 88 9 92 94 96 98 2 4 6 8 1 12 14 16 ACTUAL CAPITAL EXPENDITURES Percent Making a Capital Expenditure During the Last Six Months 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 56 57 6 215 59 6 58 6 54 58 61 58 58 58 62 62 216 61 58
17 NFIB Small Business Economic Trends Monthly Report 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 24 25 23 Equipment 4 43 43 Furniture or Fixtures 12 12 13 Add. Bldgs. or Land 5 8 5 Improved Bldgs. or Land 16 16 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 3 3 $1, to $4,999 7 9 9 $5, to $9,999 7 5 8 $1, to $49,999 18 21 2 $5, to $99,999 9 8 9 $1, + 13 11 14 No Answer 1 2 1 CAPITAL EXPENDITURE PLANS Percent Planning a Capital Expenditure During Next Three to Six Months 211 21 21 22 2 2 22 22 23 22 22 24 23 212 23 22 2 24 24 22 23 26 23 23 19 19 213 2 24 23 22 23 24 25 26 27 24 24 25 214 23 24 22 24 24 23 25 29 24 27 25 28 215 25 25 22 25 25 24 26 26 27 27 25 25 216 25 23
18 NFIB Small Business Economic Trends Monthly Report Percent of Firms Percent of Firms SINGLE MOST IMPORTANT PROBLEM Problem SINGLE MOST IMPORTANT PROBLEM February 216 Current One Year Ago Survey High Survey Low Taxes 21 2 32 8 Inflation 3 2 41 Poor Sales 11 12 34 2 Fin. & Interest Rates 1 3 37 1 Cost of Labor 7 6 9 2 Govt. Reqs. & Red Tape 19 21 27 4 Comp. From Large Bus. 8 8 14 4 Quality of Labor 12 14 24 3 Cost/Avail. of Insurance 1 9 29 4 Other 8 5 31 1 4 SELECTED SINGLE MOST IMPORTANT PROBLEM Inflation, Big Business, Insurance and Regulation January 1986 to February 216 Big Business Inflation Insurance Regulation 3 2 1 86 88 9 92 94 96 98 2 4 6 8 1 12 14 16 4 SELECTED SINGLE MOST IMPORTANT PROBLEM Taxes, Interest Rates, Sales and Labor Quality January 1986 to February 216 Taxes Sales 3 Interest Rates & Finance Labor Quality 2 1 86 88 9 92 94 96 98 2 4 6 8 1 12 14 16
Percent 19 NFIB Small Business Economic Trends Monthly Report SURVEY PROFILE OWNER/MEMBERS PARTICIPATING IN ECONOMIC SURVEY NFIB Actual Number of Firms 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 68 152 615 568 215 1663 716 575 15 616 62 1495 656 556 1411 61 59 216 1438 756 Percent 25 2 15 1 5 NFIB OWNER/MEMBERS PARTICIPATING IN ECONOMIC SURVEY Industry of Small Business NFIB OWNER/MEMBERS PARTICIPATING IN ECONOMIC SURVEY Number of Full and Part-Time Employees 3 25 2 15 1 5
2 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 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
21 NFIB Small Business Economic Trends Monthly Report 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