NFIB SMALL BUSINESS ECONOMIC TRENDS William C. Dunkelberg Holly Wade November 213 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 5% - 4 16% Plans to Make Capital Outlays 23% -2 8% Plans to Increase Inventories -1% 1-4% Expect Economy to Improve -17% -7 28% Expect Real Sales Higher 2% -6 24% Current Inventory -5% -5 2% Current Job Openings 21% 1-4% Expected Credit Conditions -8% -1 4% Now a Good Time to Expand 6% -2 8% Earnings Trends -23% % Total Change -25 * (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 lost 2.3 points to 91.6. Two components, the outlook for business conditions and the outlook for real sales gains, accounted for 52 percent of the Index decline. A weaker outlook for business produced dissatisfaction with inventory stocks, and fewer plans to create new jobs. The average value of the Index since the recovery started is 91, 8 points below the 35 year average through 27 and well below readings typically experienced in a recovery. The current reading is hardly something to cheer about. It is very hard to identify any current developments that would make owners more optimistic. The new budget deadline of January 15, 214 is approaching quickly and Congress continues to wrangle over the healthcare law and little else. LABOR MARKETS Twelve percent of the owners (up 1 point) reported adding an average of 3.5 workers per firm over the past few months. Offsetting that, 9 percent reduced employment (down 2 points) an average of 2.8 workers (seasonally adjusted), producing the seasonally adjusted gain of.11 workers per firm overall. The remaining 79 percent of owners made no net change in employment. Fifty-one percent of the owners hired or tried to hire in the last three months and 4 reported few or no qualified applicants for open positions. Reports of workforce reductions have reached normal or sub-normal levels, explaining the favorable levels of initial claims for unemployment. Nine percent reported reducing employment, the lowest reading since 26. But owners report sub-par levels of hiring, so job growth remains anemic even with low levels of initial claims. Twenty-one percent of all owners reported job openings they could not fill in the current period (up 1 point), a positive signal for the unemployment rate. But, job creation plans lost 4 points from September, landing at a net 5 percent. CAPITAL SPENDING The frequency of reported capital outlays over the past six months rose 2 points to 57 percent, the best showing since January, 28 -- improved, but still relatively weak. A net 2 percent of all owners expect improved real sales volumes, down 6 points. Seventeen percent reported poor sales as their top business problem, unchanged from September. Reported sales trends deteriorated 2 points to a net negative 8 percent. Overall, the environment for capital spending deteriorated as what little confidence owners had in the future eroded further. The percent of owners planning capital outlays in the next 3 to 6 months fell 2 points to 23 percent. Six percent characterized the current period as a good time to expand facilities (down 2 points). This survey was conducted in October 213. A sample of 1,799 small-business owners/members was drawn. One thousand eight hundred and seventy-three (1,94) usable responses were received a response rate of 18 percent. 1 NFIB Small Business Economic Trends Quarterly Report
SUMMARY INVENTORIES AND SALES The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past 3 months compared to the prior three months deteriorated 2 points to a negative 8 percent. Seventeen percent still cite weak sales as their top business problem. The net percent of owners expecting higher real sales volumes fell 6 points to 2 percent of all owners (seasonally adjusted). Not much help for hiring or inventory investment in those numbers. The pace of inventory reduction continued, with a net negative 6 percent of all owners reporting growth in inventories (seasonally adjusted), 1 point better than September. The net percent of owners planning to add to inventory stocks was a net negative 1 percent. The negative outlook for the economy and real sales prospects adversely impacted inventory satisfaction. The net percent of owners viewing current stocks as too low fell to a net negative 5 percent, the worst reading since 211. INFLATION Seasonally adjusted, the net percent of owners raising selling prices was 5 percent, up 4 points. Twenty percent plan on raising average prices in the next few months (unchanged), and 3 percent plan reductions (up 1 point). Seasonally adjusted, a net 18 percent plan price hikes, down 1 point. Not much of this is likely to stick if owners are correctly forecasting the future of the economy over the next six months. 2 NFIB Small Business Economic Trends Quarterly Report PROFITS AND WAGES Earnings trends did not improve in October, holding at a negative 23 percent. Two percent reported reduced worker compensation and 18 percent reported raising compensation, yielding seasonally adjusted net 16 percent reporting higher worker compensation (down 1 point). A net seasonally adjusted 1 percent plan to raise compensation in the coming months, down 3 points. Overall, the compensation picture remained at the better end of experience in this recovery, but historically weak for periods of economic growth and recovery. This is consistent with the macro reports about weak growth in income and compensation. With a net 16 percent raising compensation but a net 5 percent raising selling prices, profits will continue to be under pressure. CREDIT MARKETS Six percent of the owners reported that all their credit needs were not met, unchanged from September. Twenty-eight percent reported all credit needs met, and 53 percent explicitly said they did not want a loan. Only 2 percent reported that financing was their top business problem. Twenty-eight percent of all owners reported borrowing on a regular basis, down 2 points and a record low. A net 6 percent reported loans harder to get compared to their last attempt (asked of regular borrowers only), up 1 point from September. The net percent of owners expecting credit conditions to ease in the coming months was a seasonally adjusted negative 8 percent, 1 point worse than September. A surprising result in an economy with the most aggressive monetary policy in history.
COMMENTARY Typical of the reporting by the mainstream media on the economy, CNN (Your Money, Nov 2) asserted that stingy credit was dragging down the small business sector; no mention of the impact of Washington antics. Banks are once again being blamed for the slow recovery, not the Administration s policies (or lack thereof). However, only 2 percent of NFIB members cite credit and interest rates as their top business problem, and a record 66 percent expressed no interest in a loan, obviously due to their dismal view of the future of the economy. It s not a problem of credit supply; it s a lack of credit demand due primarily to poor economic prospects. Consumer sentiment is sympathetic to that notion as optimism posted declines in October, signaling that customers are less optimistic as well. The healthcare law is revealing itself to be everything opponents feared. But what else could be expected when a few hundred people (in one party) decide to restructure 15 percent of the economy. Nobody read the bill, nobody understood the whole thing, the big picture. Now, as it dissembles, a panicked Administration is throwing even more tax dollars at the project in an effort to stem the hemorrhaging. No surprise in Washington, apparently firms that supported the Obama campaign were awarded contracts for most of the work. Kind of like giving Ms. Pelosi s husband the exclusive right to dispose of our unneeded post office real estate - what a deal. The Optimism Index gave up 2.3 points, falling to the average reading in the recovery of about 91.. No progress. The outlook for business conditions continued to deteriorate, giving up 15 percentage points over the past two months. Plans to hire, expand, make capital outlays, and order more inventory were all weak. Consumers are pessimistic, with sentiment measures falling and fewer than 1 in 1 characterizing government policy as good. The misstatements, exaggerations and distortions being pitched to the public are stunning, but after all, these are politicians. Federal Reserve policy becomes more tenuous as time passes, with many observers believing that QE should end, but it doesn t, limping on toward another trillion dollars of bond purchases. Shoving too much fuel into the engine can produce a stall. Certainly job growth is not responding, only the counter-factual could justify keeping the foot on the gas pedal. The larger the Fed portfolio, the greater the uncertainty about the consequences of normalizing policy, whatever that may mean anymore. And the longer the Fed distorts prices (assets, interest rates), the larger the misallocation of resources that results and the more painful when reality sets in and it must. The most critical issues for small business owners are rising health insurance costs, uncertainty about the economy and about economic policy, energy costs, the cost of regulation and red tape and a multitude of issues with the tax code (complexity, frequent changes, loss of profits to fund growth). None of these issues has improved and the prospects are not bright. So, owners will continue to be very cautious, operating in maintenance mode until the future for the economy becomes clearer. 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) 28 91.8 92.9 89.6 91.5 89.3 89.2 88.2 91.1 92.9 87.5 87.8 85.2 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 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 October Quarter 213 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 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 28 9 8 5 6 4 4 6 6 11 5 7 7 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 MOST IMPORTANT REASON FOR EXPANSION OUTLOOK Reason Percent by Expansion Outlook October 213 Reason Good Time Not Good Time Uncertain Economic Conditions 1 34 11 Sales Prospects 2 4 1 Fin. & Interest Rates 1 1 1 Cost of Expansion 3 2 Political Climate 25 9 Other/Not Available 2 OUTLOOK FOR GENERAL BUSINESS CONDITIONS Net Percent ( Better Minus Worse ) Six Months From Now 28-22 -9-23 -12-12 -19-17 4 14-4 -2-13 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 5 NFIB Small Business Economic Trends Quarterly Report
SMALL BUSINESS EARNINGS EARNINGS Actual Last Three Months January Quarter 1974 to October Quarter 213-1 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 ACTUAL EARNINGS CHANGES Net Percent ( Higher Minus Lower ) Last Three Months Compared to Prior Three Months 28-27 -25-33 -28-28 -33-37 -3-35 -35-38 -42 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 6 NFIB Small Business Economic Trends Quarterly Report MOST IMPORTANT REASON FOR LOWER EARNINGS Percent Reason October 213 Reason Current Month One Year Ago Two Years Ago Sales Volume 15 18 21 Increased Costs* 12 11 11 Cut Selling Prices 3 3 3 Usual Seasonal Change 4 3 4 Other 3 4 1 * 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 October 213 Expected Actual -4 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 ACTUAL SALES CHANGES Net Percent ( Higher Minus Lower ) Last Three Months Compared to Prior Three Months 28-7 -8-11 -9-11 -12-15 -1-11 -21-25 -29 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 SALES EXPECTATIONS Net Percent ( Higher Minus Lower ) During Next Three Months 28 4-3 -3-11 -11-9 -6-2 -16-14 -18 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 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 October Quarter 213 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 Actual Planned ACTUAL PRICE CHANGES Net Percent ( Higher Minus Lower ) Compared to Three Months Ago 28 8 13 18 2 23 29 32 26 2 15-6 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 8 NFIB Small Business Economic Trends Quarterly Report PRICE PLANS Net Percent ( Higher Minus Lower ) in the Next Three Months 28 26 22 29 31 32 36 38 3 24 18 11 3 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
SMALL BUSINESS EMPLOYMENT ACTUAL EMPLOYMENT CHANGES Net Percent ( Increase Minus Decrease ) in the Last Three Months 28-3 -7-9 -1-12 -5-4 -1-9 -1-18 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 QUALIFIED APPLICANTS FOR JOB OPENINGS Percent Few or No Qualified Applicants 28 37 36 36 37 33 39 36 35 38 35 31 3 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 Percent 4 3 2 1 EMPLOYMENT Planned Next Three Months and Current Job Openings January Quarter 1974 to October Quarter 213 Planned Job Openings -1 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 9 NFIB Small Business Economic Trends Quarterly Report
SMALL BUSINESS EMPLOYMENT (CONTINUED) JOB OPENINGS Percent With Positions Not Able to Fill Right Now 28 24 2 19 21 15 21 17 15 18 14 14 14 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 HIRING PLANS Net Percent ( Increase Minus Decrease ) in the Next Three Months 28 9 11 3 5 2 5 5 9 7-4 -6 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 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 October 213 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
SMALL BUSINESS COMPENSATION (CONTINUED) ACTUAL COMPENSATION CHANGES Net Percent ( Increase Minus Decrease ) During Last Three Months 28 25 23 24 2 15 2 18 18 17 15 13 9 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 COMPENSATION PLANS Net Percent ( Increase Minus Decrease ) in the Next Three Months 28 12 12 15 14 8 12 12 11 1 9 1 4 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 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 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 October Quarter 213-32 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 * For the population borrowing at least once every three months. REGULAR BORROWERS Percent Borrowing at Least Once Every Three Months 28 36 34 33 36 35 35 34 34 32 33 31 33 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 12 NFIB Small Business Economic Trends Quarterly Report AVAILABILITY OF LOANS Net Percent ( Easier Minus Harder ) Compared to Three Months Ago (Regular Borrowers) 28-7 -5-7 -9-8 -7-9 -1-11 -9-11 -12 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
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) 28 34/5 35/4 32/6 34/5 34/7 35/5 32/7 35/6 33/6 31/6 31/7 32/6 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 EXPECTED CREDIT CONDITIONS Net Percent ( Easier Minus Harder ) During Next Three Months (Regular Borrowers) 28-9 -8-9 -11-1 -1-12 -11-13 -16-13 -15 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 Relative (thick line) 5 4 3 2 1-1 -2-3 INTEREST RATES Relative Rates and Actual Rates Last Three Months January Quarter 1974 to October Quarter 213-4 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 2 15 1 5 Actual (thin line) 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 28-9 -5-12 -15-11 -4-2 -3-2 -6-8 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 *Borrowing at Least Once Every Three Months. ACTUAL INTEREST RATE PAID ON SHORT-TERM LOANS BY BORROWERS Average Interest Rate Paid 28 8.3 8.1 8.3 7.7 6.9 7.1 7. 6.9 7.1 6.6 7. 6.6 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 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 October Quarter 213 Actual Planned -3 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12
SMALL BUSINESS INVENTORIES (CONTINUED) ACTUAL INVENTORY CHANGES Net Percent ( Increase Minus Decrease ) During Last Three Months 28-4 -2-7 -1-12 -11-14 -13-12 -13-17 -21 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 INVENTORY SATISFACTION Net Percent ( Too Low Minus Too Large ) at Present Time 28-4 -4-1 -1-3 -1-4 -3-1 -4-4 -7 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 INVENTORY PLANS Net Percent ( Increase Minus Decrease ) in the Next Three to Six Months 28-4 -2-2 -1-4 -5-4 -9-3 -5-6 -4 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 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 Satisfaction Plans CAPITAL EXPENDITURES 8 Actual Last Six Months and Planned Next Three Months January Quarter 1974 to October Quarter 213 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 16 NFIB Small Business Economic Trends Quarterly Report ACTUAL CAPITAL EXPENDITURES Percent Making a Capital Expenditure During the Last Six Months 28 58 58 57 56 54 52 52 54 52 54 56 51 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
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 2 19 18 Equipment 4 37 36 Furniture or Fixtures 12 12 11 Add. Bldgs. or Land 6 6 5 Improved Bldgs. or Land 14 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 3 4 4 $1, to $4,999 9 9 9 $5, to $9,999 7 5 6 $1, to $49,999 16 17 17 $5, to $99,999 9 7 6 $1, + 11 1 9 No Answer 2 2 1 CAPITAL EXPENDITURE PLANS Percent Planning a Capital Expenditure During Next Three to Six Months 28 25 26 25 26 25 26 21 23 21 19 21 17 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 17 NFIB Small Business Economic Trends Quarterly Report
SINGLE MOST IMPORTANT PROBLEM SINGLE MOST IMPORTANT PROBLEM October 213 Problem Current One Year Ago Survey High Survey Low Taxes 2 2 32 8 Inflation 3 6 41 Poor Sales 17 22 33 2 Fin. & Interest Rates 2 3 37 2 Cost of Labor 5 3 9 2 Govt. Reqs. & Red Tape 21 19 27 4 Comp. From Large Bus. 8 7 14 4 Quality of Labor 8 5 23 3 Cost/Avail. of Insurance 8 8 29 4 Other 8 7 31 2 4 SELECTED SINGLE MOST IMPORTANT PROBLEM Insurance, Big Business Competition, Inflation, and Regulation January Quarter 1974 to October Quarter 213 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 4 3 2 1 SELECTED SINGLE MOST IMPORTANT PROBLEM Sales, Fin. & Interest Rates, Labor Cost, Labor Quality, and Taxes January Quarter 1974 to October Quarter 213 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
SURVEY PROFILE OWNER/MEMBERS PARTICIPATING IN ECONOMIC SURVEY NFIB Actual Number of Firms 28 1845 7 735 1768 737 73 1827 812 743 1992 826 85 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 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