1 | N F I B S m a l l B u s i n e s s E c o n o m i c T r e n d s
M o n t h l y R e p o r t
Owner sentiment increased by 0.9 points to 92.5, a dismal reading as has been the case since the recovery started. Over half of the improvement was accounted for by the labor market components which is certainly good news, lifting them closer to normal levels. Expected business conditions though deteriorated further - lots of dismal views of the economy coming next year. The Index has stayed in a “trading range” between 86.4 and 95.4 since the recovery started, poor in comparison to an average reading of 100 from 1973 through 2007.
NFIB owners increased employment by an average of 0.05 workers per firm in November (seasonally adjusted), half the October figure, but positive. Seasonally adjusted, 14 percent of the owners (up 2 points) reported adding an average of 3.7 workers per firm over the past few months. Offsetting that, 12 percent reduced employment (up 3 points) an average of 3.4 workers. Fifty-one percent of the owners hired or tried to hire in the last three months and 44 percent reported few or no qualified applicants for open positions. This is the highest level of hiring activity since October 2007. Twenty-three percent of all owners reported job openings they could not fill in the current period (up 2 points), a positive signal for the unemployment rate and the highest reading since January 2008. Thirteen percent reported using temporary workers, down 2 points from October. Job creation plans gained 4 points, rising to 9 percent, reversing the loss posted in October.
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 was unchanged at a negative 8 percent. Fifteen percent still cite weak sales as their top business problem, but is the lowest reading since June 2008. The net percent of owners expecting higher real sales volumes rose 1 point to 3 percent of all owners after falling 6 points in October (seasonally adjusted), a weak showing. The pace of inventory reduction continued with a seasonally adjusted net negative 7 percent of all owners reporting growth in inventories, 1 point worse than in October. 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 improved only 1 point, to negative 4 percent in November. Inventories are too large, especially given the poor outlook for sales improvements. The net percent of owners planning to add to inventory stocks was a net 0 percent (up 1 point), no new orders for inventory when stocks are excessive compared to expected sales. T
his survey was conducted in November 2013. A sample of 3,938 small-business owners/members was drawn. Seven hundred seventy-three (762) usable responses were received – a response rate of 19 percent.