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Small Businesses: Difference between revisions
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=== Magaly === | === Magaly === | ||
Currently small businesses despite the evident drop in sales and earnings for most, still seem optimistic about their financial health, and they seem to be focused still on finding the correct talent, as job openings continue to be very high compared to history. However, positive expectations of future revenue and growth seem to be more sentiment base, and the current stable conditions could be having a biased impact on their sentiment, so I don't think we can take it as a reliable indicator of future conditions. | Currently small businesses despite the evident [[Small Businesses#NFIB Survey|drop in sales and earnings for most]], still seem optimistic about their financial health, and they seem to be focused still on finding the correct talent, as job openings continue to be very high compared to history. However, positive expectations of future revenue and growth seem to be more sentiment base, and the current stable conditions could be having a biased impact on their sentiment, so I don't think we can take it as a reliable indicator of future conditions. | ||
Analysis of the 2008 recession indicates that small businesses were hurt mostly by falling demand more than by credit tightened, however concern with sales started until late in 2008, after conditions deteriorated significantly. So is difficult in my opinion to forecast that while sales have been stable currently, they will remain this way later on, as it seems more of a lagging data. | Analysis of the 2008 recession indicates that small businesses were hurt mostly by falling demand more than by credit tightened, however concern with sales started until late in 2008, after conditions deteriorated significantly. So is difficult in my opinion to forecast that while sales have been stable currently, they will remain this way later on, as it seems more of a lagging data. | ||
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=== May 2023 === | === May 2023 === | ||
The Optimism Index increased 0.4 points in May to 89.4. This is the 17th consecutive month below the 49-year average of 98. The last time the Index was at or above the average was December 2021. Of the 10 index components, 4 increased, 5 decreased, and 1 was unchanged.<ref>https://strgnfibcom.blob.core.windows.net/nfibcom/SBET-May-2023.pdf</ref> | [[File:Screenshot 2023-07-06 153814.png|thumb|https://strgnfibcom.blob.core.windows.net/nfibcom/SBET-May-2023.pdf]] | ||
The Optimism Index increased 0.4 points in May to 89.4. This is the 17th consecutive month below the 49-year average of 98. The last time the Index was at or above the average was December 2021. Of the 10 index components, 4 increased, 5 decreased, and 1 was unchanged.<ref>https://strgnfibcom.blob.core.windows.net/nfibcom/SBET-May-2023.pdf</ref> | |||
"Overall, small business owners are clearly in a recession mood, expressing great concern for future business conditions. But until customers stop coming in, owners (especially in services) will continue to try to hire workers, increasing compensation to attract applicants and retain their current workforce." | "Overall, small business owners are clearly in a recession mood, expressing great concern for future business conditions. But until customers stop coming in, owners (especially in services) will continue to try to hire workers, increasing compensation to attract applicants and retain their current workforce." | ||
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* -50% of business owners are expecting better overall business conditions (1 point worse than April and 11 percentage points better than a year ago). | * -50% of business owners are expecting better overall business conditions (1 point worse than April and 11 percentage points better than a year ago). | ||
* 57% of small business owners reported capital outlays in the last 6-months (up 1 point from April) and '''25% are planning capital purchases in the next 3-months (up 6 points from April)''', a very positive move but historically low. | * 57% of small business owners reported capital outlays in the last 6-months (up 1 point from April) and '''25% are planning capital purchases in the next 3-months (up 6 points from April)''', a very positive move but historically low. | ||
* 44% of small business owners report job openings they cannot fill (down 1 point from April) and '''19% plan on hiring in the next 3-months (up 2 points from April).''' The difficulty in filling open positions is particularly acute in the construction, transportation, and manufacturing sectors where compensation gains are more frequently reported. Openings are lowest in the agriculture and finance sectors. | * [[File:Screenshot 2023-07-06 153838.png|thumb|https://strgnfibcom.blob.core.windows.net/nfibcom/SBET-May-2023.pdf]]44% of small business owners report job openings they cannot fill (down 1 point from April) and '''19% plan on hiring in the next 3-months (up 2 points from April).''' The difficulty in filling open positions is particularly acute in the construction, transportation, and manufacturing sectors where compensation gains are more frequently reported. Openings are lowest in the agriculture and finance sectors. | ||
* 41% of small businesses raised compensation (up 1 point from April) and '''22% plan on raising compensation in the next 3-months (up 1 point from April).''' | * 41% of small businesses raised compensation (up 1 point from April) and '''22% plan on raising compensation in the next 3-months (up 1 point from April).''' | ||
* Overall, '''63 percent reported hiring or trying to hire in May, up 3 points from April'''. Fifty-five percent (89 percent of those hiring or trying to hire) of owners reported few or no qualified applicants for the positions they were trying to fill (unchanged). | * Overall, '''63 percent reported hiring or trying to hire in May, up 3 points from April'''. Fifty-five percent (89 percent of those hiring or trying to hire) of owners reported few or no qualified applicants for the positions they were trying to fill (unchanged). | ||