C URRENT S TATE OF T HE S MALL B USI NESS E CONOMY Holly Wade NFIB Research Center Washington, D.C.
S MALL B USI NESS O PTI MI SM I NDEX AND C OMPONENTS
Small Business Economic Trends Overview Survey launched 4 th quarter 1973 Quarterly survey 1973 – 1985, monthly 1986 – present Random sample of NFIB members (10,000 sample quarter months, between months 5,000) Questionnaire mailed 1 st of the month, reminder mail around the 15 th 2/3 of responses returned first half of the month, 1/3 last half Can bifurcate around special events providing “before/after” analyses Generally leads macro indicators (e.g. January survey predicts Q2) Other NFIB Research Center Surveys Small Business Problems and Priorities (updated every 4 years since 1982) Small Business Introduction to the Tax Cuts and Jobs Act NFIB Small Business National Poll series (Job Openings, Compensation, Payments, Regulations, Cash Flow)
2016 Small Business Problems and Priorities % not a 2012 Rank Problem % critical problem Rank 1 Cost of Health Insurance 52 8 1 2 Unreasonable Government Regulations 33 6 5 3 Federal Taxes on Business Income 29 8 6 4 Uncertainty over Economic Conditions 26 5 2 5 Tax Complexity 27 6 7 6 Uncertainty over Government Actions 26 7 4 7 Frequent Changes in Federal Tax Laws 21 8 8 8 Property Taxes 23 11 9 9 State Taxes on Business Income 23 12 10 10 Locating Qualified Employees 24 14 32
Small Business Optimism Index Based on Ten Survey Indicators (Seasonally Adjusted 1986=100) 110 105 100 95 90 85 80 75 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Optimism Index Components Hard: Job Creation Plans, Job Openings, Inventory Plans, Earnings, Capital Expenditure Plans Soft: Expected Business Conditions, Outlook for Expansion, Expected Real Sales, Expected Credit Conditions, Inventory Satisfaction 150 100 50 0 -50 -100 -150 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Hard Soft Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Single Most Important Problem 35 30 25 Percent of Firms 20 15 10 5 0 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19 Taxes Regulations Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Outlook for General Business Conditions Net Percent (“Better” Minus “Worse”) Six Months From Now (Seasonally Adjusted) 60 50 40 Net Percent of Firms 30 20 10 0 -10 -20 -30 -40 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Good Time to Expand Percent Next Three Months “Good Time to Expand” (Seasonally Adjusted) 40 35 30 Percent of Firms 25 20 15 10 5 0 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19 Quarterly data (Jan, Apr, Jul, Oct) Monthly data (August)
Uncertainty Index Sum of “Don’t Know” & “ Uncertain” Answers on 6 Questions (Higher Values Indicate Elevated Uncertainty) 90 85 Uncertain 80 75 70 65 60 55 50 45 Certain (Good OR Bad) 40 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Real Sales Volume Expectations Net Percent (“Higher” minus “Lower”) in the Next Three Months 50 40 30 Net Percent of Firms 20 10 0 -10 -20 -30 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Actual Sales Changes Net Percent (“Higher” minus “Lower”) the Last Three Months Compared to the Prior Three Months 30 20 10 Net Percent of Firms 0 -10 -20 -30 -40 75 78 81 84 87 90 93 96 99 02 05 08 11 14 17 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Actual Earnings Changes Net Percent (“Higher” minus “Lower”) the Last Three Months Compared to the Prior Three Months 10 0 Net Percent of Firms -10 -20 -30 -40 -50 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
C REDI T M ARKETS C REDIT A VAILABILITY AND C OSTS
Loan Availability Net Percent (“Harder” minus “Easier”) Reporting Loans Harder to Get Compared to the Prior Three Months 30 25 Net Percent of Firms 20 15 10 5 0 -5 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., Apr., July, Oct.) Monthly data (August)
Regular Borrowers Percent Borrowing at Least Once Every Three Months 55 50 45 Percent of Firms 40 35 30 25 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Quarterly data (Jan., Apr., July, Oct.) Monthly data (August)
All Borrowing Needs Not Satisfied 12 10 Percent of Firms 8 6 4 2 0 93 96 99 02 05 08 11 14 17 Quarterly data (Jan., Apr., July., Oct.) Monthly data (August)
Percent of All Firms Not Wanting a Loan 60 Recession Starts 55 Percent of Firms 50 45 40 35 93 96 99 02 05 08 11 14 17 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Single Most Important Problem 45 40 35 30 Percent of Firms 25 20 Oil $140/BBL 15 10 5 0 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19 Inflation Credit Quarterly data (Jan., April, July, Oct.)
Average Rate Paid on Short-Term Loans 20 18 16 14 Percent of Firms 12 10 8 6 4 2 0 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., Apr., July, Oct.) Monthly data (August)
Relative Interest Rate Paid by Regular Borrowers Net Percent (“Higher” Minus “Lower”) Compared to Three Months Ago 50 40 30 Net Percent of Firms 20 10 0 -10 -20 -30 -40 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
P RI CES AND I NFLATI ON
Actual Price Increases Net Percent (“Higher” Minus “Lower”) Compared to Three Months Ago (Seasonally Adjusted) 75 60 Net Percent of Firms 45 30 15 0 -15 -30 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Planned and Actual Labor Compensation Changes 40 35 30 Net Percent of Firms 25 20 15 10 5 0 84 87 90 93 96 99 02 05 08 11 14 17 Increased Plan to Increase Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Changes in Prices and Labor Compensation Net Percent (“Higher” minus “Lower”) Compared to Three Months Ago 40 30 Net Percent of Firms 20 10 0 -10 -20 -30 84 87 90 93 96 99 02 05 08 11 14 17 Raised Compensatoin Raised Prices Quarterly data (Jan., April, July, Oct.) Monthly data (August)
E MPLOYMENT , J OB C REATI ON AND C OMPENSATI ON
Unfilled Job Openings Percent with at Least One Unfilled Opening 40 35 30 Percent of Firms 25 20 15 10 5 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Job Creation Plans Net Percent (“Increase” minus “Decrease”) in Next Three Months 30 25 20 Net Percent of Firms 15 10 5 0 -5 -10 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Single Most Important Problems 30 25 20 Percent of Firms 15 10 5 0 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19 Labor Cost Labor Quality
Net Percent of Owners Increasing Employment 15 10 5 Net Percent of Firms 0 -5 -10 -15 -20 -25 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
C API TAL E XPENDI TURES AND I NVENTORY I NVESTMENT
Actual Capital Outlays Percent Making a Capital Expenditure During the Last Six Months 75 70 65 Percent of Firms 60 55 50 45 40 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Planned Capital Outlays Percent Planning to Make a Capital Expenditure in the Next Six Months 45 40 Percent of Firms 35 30 25 20 15 75 78 81 84 87 90 93 96 99 02 05 08 11 14 17 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Actual Change in Inventory Net Percent (“Increase” minus “Decrease” During the Last Three Months 10 5 Net Percent of Firms 0 -5 -10 -15 -20 -25 -30 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
Inventory Investment Plans Net Percent (“Increase” minus “Decrease”) in the Next Three to Six Months 15 10 Net Percent of Firms 5 0 -5 -10 -15 -20 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19 Quarterly data (Jan., April, July, Oct.) Monthly data (August)
NFIB Small Business Economic Trends Survey June 2019 Have recent changes in trade policy with China impacted your business? 2% 1. Significant positive impact 3% 2. Somewhat positive impact 60% 3. No impact 22% 4. Somewhat negative impact 8% 5. Significant negative impact 5% 6. NA
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