Global| May 14 2013U.S. Small Business Optimism Reaches Six Month High
by:Tom Moeller
|in:Economy in Brief
Summary
Small business optimism rebounded last month and more-than-recovered its March weakness. The National Federation of Independent Business reported that its Small Business Optimism Index jumped during April to a seasonally adjusted 92.0 [...]
Small business optimism rebounded last month and more-than-recovered its March weakness. The National Federation of Independent Business reported that its Small Business Optimism Index jumped during April to a seasonally adjusted 92.0 from 89.5. The 2.5 point increase was to the highest level since October.
Powering last month's improvement was a substantial rise in the percentage of firms expecting the economy to improve. In addition, a strengthened net 4% of firms expected higher real sales in six months, its best level in twelve months. Planned inventory investment also improved to its highest level (0.0%) since last spring. A much greater net 6% of firms planned to increase employment. A continued scarcity of qualified labor was illustrated by the 18% of firms with positions not able to be filled right now, compared to 8% at the 2009 low. Finally, the percentage of firms planning to raise worker compensation held at 9% and remained below last year's high of 12%.
The percentage of firms reporting that credit was harder to get rebounded to 7% but remained down versus the early-2009 high of 16%. An improved 3% of firms were lifting average selling prices and a still moderate 18% were planning to raise prices.
The most important problems faced by small business were taxes (23%), government requirements (21%), poor sales (16%), insurance cost & availability (8%), competition from large businesses (8%), quality of labor (7%), inflation (5%), cost of labor (4%) and financial & interest rates (2%).
Roughly 24 million small businesses exist in the U.S. and they create 80% of all new jobs. The typical NFIB member employs 10 people and reports gross sales of about $500,000 a year. The NFIB figures can be found in Haver's SURVEYS database.
| National Federation of Independent Business | Apr | Mar | Feb | Apr'12 | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Small Business Optimism Index (SA, 1986=100) | 92.0 | 89.5 | 90.8 | 94.5 | 92.2 | 91.4 | 89.9 |
| Firms Expecting Higher Real Sales In Six Months (Net %) | 4 | -4 | 1 | 6 | 2 | 3 | 1 |
| Firms Expecting Economy To Improve (Net %) | -15 | -28 | -28 | -5 | -9 | -9 | -1 |
| Firms With Positions Not Able To Fill Right Now (Net %) | 18 | 18 | 21 | 17 | 17 | 14 | 10 |
| Firms With Few or No Qualified Applicants For Job Openings (Net %) | 38 | 36 | 34 | 34 | 35 | 32 | 27 |
| Firms Reporting That Credit Was Harder To Get (Net %) | 7 | 4 | 7 | 7 | 8 | 10 | 13 |
| Firms Raising Avg. Selling Prices (Net %) | 3 | -1 | 2 | 8 | 4 | 5 | -12 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
