Small Business Economic Trends Overview Survey launched 4 th quarter - - PowerPoint PPT Presentation

CURRENT STATE OF THE SMALL BUSI NESS ECONOMY

Holly Wade NFIB Research Center Washington, D.C.

SMALL BUSI NESS OPTI MI SM

I NDEX AND COMPONENTS

Small Business Economic Trends Overview

• Survey launched 4th 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 1st of the month, reminder mail around the 15th
• 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)

Rank Problem % critical % not a problem 2012 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

2016 Small Business Problems and Priorities

Small Business Optimism Index

Based on Ten Survey Indicators (Seasonally Adjusted 1986=100) 75 80 85 90 95 100 105 110 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

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

5 10 15 20 25 30 35 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19 Taxes Regulations Percent of Firms 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)

• 40
• 30
• 20
• 10

10 20 30 40 50 60 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) Net Percent of Firms

5 10 15 20 25 30 35 40 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) Percent of Firms

Good Time to Expand

Percent Next Three Months “Good Time to Expand” (Seasonally Adjusted)

Uncertainty Index

Sum of “Don’t Know” & “ Uncertain” Answers on 6 Questions (Higher Values Indicate Elevated Uncertainty)

40 45 50 55 60 65 70 75 80 85 90 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18

Quarterly data (Jan., April, July, Oct.) Monthly data (August)

Uncertain Certain (Good OR Bad)

Real Sales Volume Expectations

Net Percent (“Higher” minus “Lower”) in the Next Three Months

• 30
• 20
• 10

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) Net Percent of Firms

• 40
• 30
• 20
• 10

10 20 30 75 78 81 84 87 90 93 96 99 02 05 08 11 14 17 Quarterly data (Jan., April, July, Oct.) Monthly data (August) Net Percent of Firms

Actual Sales Changes

Net Percent (“Higher” minus “Lower”) the Last Three Months Compared to the Prior Three Months

Actual Earnings Changes

Net Percent (“Higher” minus “Lower”) the Last Three Months Compared to the Prior Three Months

• 50
• 40
• 30
• 20
• 10

10 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., April, July, Oct.) Monthly data (August) Net Percent of Firms

CREDI T MARKETS

CREDIT AVAILABILITY AND COSTS

• 5

5 10 15 20 25 30 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18

Net Percent of Firms

Quarterly data (Jan., Apr., July, Oct.) Monthly data (August)

Loan Availability

Net Percent (“Harder” minus “Easier”) Reporting Loans Harder to Get Compared to the Prior Three Months

25 30 35 40 45 50 55 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Regular Borrowers

Percent Borrowing at Least Once Every Three Months

Quarterly data (Jan., Apr., July, Oct.) Monthly data (August) Percent of Firms

All Borrowing Needs Not Satisfied

2 4 6 8 10 12 93 96 99 02 05 08 11 14 17 Percent of Firms Quarterly data (Jan., Apr., July., Oct.) Monthly data (August)

Percent of All Firms Not Wanting a Loan

35 40 45 50 55 60 93 96 99 02 05 08 11 14 17 Quarterly data (Jan., April, July, Oct.) Monthly data (August)

Recession Starts

Percent of Firms

Single Most Important Problem

5 10 15 20 25 30 35 40 45 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19 Inflation Credit Percent of Firms Quarterly data (Jan., April, July, Oct.) Oil $140/BBL

2 4 6 8 10 12 14 16 18 20 82 85 88 91 94 97 00 03 06 09 12 15 18 Percent of Firms Quarterly data (Jan., Apr., July, Oct.) Monthly data (August)

Average Rate Paid on Short-Term Loans

Relative Interest Rate Paid by Regular Borrowers

Net Percent (“Higher” Minus “Lower”) Compared to Three Months Ago

• 40
• 30
• 20
• 10

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) Net Percent of Firms

PRI CES AND I NFLATI ON

Actual Price Increases

Net Percent (“Higher” Minus “Lower”) Compared to Three Months Ago (Seasonally Adjusted)

• 30
• 15

15 30 45 60 75 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) Net Percent of Firms

Planned and Actual Labor Compensation Changes

5 10 15 20 25 30 35 40 84 87 90 93 96 99 02 05 08 11 14 17 Increased Plan to Increase Net Percent of Firms 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

• 30
• 20
• 10

10 20 30 40 84 87 90 93 96 99 02 05 08 11 14 17 Raised Compensatoin Raised Prices Net Percent of Firms Quarterly data (Jan., April, July, Oct.) Monthly data (August)

EMPLOYMENT, JOB CREATI ON

AND COMPENSATI ON

Unfilled Job Openings

Percent with at Least One Unfilled Opening

5 10 15 20 25 30 35 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) Percent of Firms

Job Creation Plans

Net Percent (“Increase” minus “Decrease”) in Next Three Months

• 10
• 5

5 10 15 20 25 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) Net Percent of Firms

Single Most Important Problems

5 10 15 20 25 30 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19 Labor Cost Labor Quality Percent of Firms

Net Percent of Owners Increasing Employment

• 25
• 20
• 15
• 10
• 5

5 10 15 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Net Percent of Firms Quarterly data (Jan., April, July, Oct.) Monthly data (August)

CAPI TAL EXPENDI TURES AND I NVENTORY I NVESTMENT

Actual Capital Outlays

Percent Making a Capital Expenditure During the Last Six Months

40 45 50 55 60 65 70 75 79 82 85 88 91 94 97 00 03 06 09 12 15 18 Quarterly data (Jan., April, July, Oct.) Monthly data (August) Percent of Firms

Planned Capital Outlays

Percent Planning to Make a Capital Expenditure in the Next Six Months

15 20 25 30 35 40 45 75 78 81 84 87 90 93 96 99 02 05 08 11 14 17 Quarterly data (Jan., April, July, Oct.) Monthly data (August) Percent of Firms

Actual Change in Inventory

Net Percent (“Increase” minus “Decrease” During the Last Three Months

• 30
• 25
• 20
• 15
• 10
• 5

5 10 85 88 91 94 97 00 03 06 09 12 15 18

Quarterly data (Jan., April, July, Oct.) Monthly data (August) Net Percent of Firms

Inventory Investment Plans

Net Percent (“Increase” minus “Decrease”) in the Next Three to Six Months

• 20
• 15
• 10
• 5

5 10 15 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) Net Percent of Firms

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

Have recent changes in trade policy with China impacted your business? Constr Mfg Trans Whls Retail Ag FIRE Non- prof Prof Significant positive impact 2% 2% 0% 11% 1% 1% 0% 2% 3% Somewhat positive impact 3% 4% 4% 6% 3% 3% 2% 4% 0% No impact 65% 40% 74% 37% 56% 45% 84% 69% 84% Somewhat negative impact 21% 40% 9% 37% 31% 21% 7% 12% 3% Significant negative impact 7% 11% 4% 6% 6% 26% 2% 5% 3% NA 2% 3% 9% 3% 3% 4% 5% 8% 7% 100% 100% 100% 100% 100% 100% 100% 100% 100% Total count 108 57 23 35 124 76 43 108 32

NFIB Small Business Economic Trends Survey July 2019 Would a 1 percentage point decrease in your borrowing cost (e.g., 6% to 5% interest rate) change your capital spending plans over the next 12 months? 12% 1. Yes 21%

• 2. No

24% 3. Not sure 41%

• 4. Not planning to borrow in the next 12 months.

2% 5. Didn’t answer

NFIB Small Business Economic Trends Survey February 2019 Has the federal government shutdown directly impacted your business? Check all that apply.

Industry

% of Firms Lower Delayed Collections, Administrative Increased Business Impacted Sales Payments Problems Uncertainty Construction

31% 9% 11% 6% 12%

Manufacturing

33% 4% 15% 11% 13%

Transportation

37% 0% 6% 6% 11%

Wholesale Trades 29%

10% 5% 19% 24%

Retail

32% 18% 7% 4% 8%

Agriculture

42% 6% 15% 18% 15%

Finance, Ins., RE

29% 3% 6% 13% 6%

Non-Prof. Services 40%

7% 18% 2% 19%

• Prof. Services

35% 12% 35% 6% 6%

All Firms

34% 9% 12% 8% 13%