New NFIB Industry-Specific Survey Shows Boost in Small Business Optimism
Quarterly survey focuses on construction, manufacturing, retail, and services industries
The NFIB Research Center released its industry-specific quarterly Small Business Economic Trends survey highlighting the construction, manufacturing, retail, and services industries. The Optimism Index for all four reported industries rose from April. Optimism was highest, exceeding expectations in the construction and manufacturing industries. The retail and services industries experienced lower levels of optimism compared to the other reported industries. Capital expenditure plans, expectations for better business conditions, and those reporting that it is a good time to expand improved for all industries this quarter.
“Small business optimism improved in all industries after April’s slump,” said Holly Wade, Executive Director of NFIB’s Research Center. “While most metrics improved, many owners are reporting supply chain disruptions and difficulty finding qualified employees. Despite some challenges, Main Street is feeling more confident about economic conditions and the health of their business.”
NFIB State Director Hunter Loggins said the survey reflects the experiences of many Georgia small businesses. “Owners may be feeling more hopeful, but they’re still dealing with supply chain disruptions and a lack of qualified workers. It doesn’t matter whether you’re in construction or the service sector. Without the materials you need, and without enough people work, you can’t easily serve your customers or support your community.”
The national survey was conducted in July, when the overall Optimism Index was 99.8.
Overall Highlights:
- Small construction firms are working hard to hire new employees. Fifty-three percent (seasonally adjusted) of owners in the construction industry reported unfilled job openings, up 7 points from April and the highest among all industries. Job openings in construction were 17 points higher than the level for all firms. Plans among construction firms to increase employment rose 9 points from April to a net 28% (seasonally adjusted), the second highest of all industries and 8 points higher than for all firms.
- Earnings trends in the construction industry deteriorated in July, falling 8 points from April to a net negative 19% (seasonally adjusted). This marks a reversal of the improvement seen from January through April. Compared with other industries, construction ranked second lowest, behind retail, and was 3 points below the level for all firms.
- In July, the Optimism Index for the manufacturing industry rose 6.3 points from April to 104.3, the most optimistic among all industries and the largest quarterly increase. Manufacturing firms reported significantly higher levels of earnings trends, real sales expectations, and hiring plans than all firms.
- The Optimism Index for the retail industry rose 0.7 points from April to 94.8, remaining below its historical average of 96.1 and the level for all firms. Retailers were the least optimistic of all industries and have seen the smallest improvement since April. Real sales expectations fell 16 points from April to a net negative 7% (seasonally adjusted). This decline was largely offset by an 11-point increase in job openings (37% seasonally adjusted).
- The services industry posted the largest improvement in expected business conditions across all industries, rising 13 points to a net 15% (seasonally adjusted). Despite this improvement, expectations for higher sales and plans to increase employment declined in July. The net percent of small businesses in the services industry expecting real sales to increase fell 8 points to a net 4% (seasonally adjusted), while hiring plans fell 8 points to a net 10% (seasonally adjusted). Services was the only industry to see hiring plans decline from the previous quarter, recording the lowest reading.
- In July, 63% of all small business owners reported that supply chain disruptions impacted their business to some extent (down 1 point from April). Supply chain disruptions were most prevalent in the wholesale industry (84%), and least prevalent in the professional services (32%) and finance (25%) industries.
- Overall, 69% of small business owners rated their business’ overall health as excellent or good in July (up 2 points from April). Reports were highest in professional services (80%), and lowest in manufacturing (60%) and transportation (59%).
The full report is available here.
