Despite challenging conditions, America’s small businesses and entrepreneurs continue to battle forward and continue to gain ground and exceed expectations. The latest pulse taking by the National Federation of Independent Businesses declares that, while there does remain some uncertainty, American business continues to be optimistic going into the future. While the future is a mixed bag, American small businesses owners are determined to win out. The following is taken directly from NFIB’s latest findings:
- As reported in NFIB’s monthly jobs report, job creation plans increased three points to a net 21%, an unprecedented recovery from April’s reading of 1%. Construction job growth continues to be strong but owners in the sector are having a particularly hard time finding skilled employees. The manufacturing sector’s employment remained strong but not as strong as seen in previous months. The service sector is the missing link and the key to stronger job growth going forward.
- Of those making expenditures, 34% reported spending on new equipment, 21% acquired vehicles, and 12% improved or expanded facilities. Six percent acquired new buildings or land for expansion and 9% spent money for new fixtures and furniture.
- The net percent of owners reporting inventory increases improved two points to a net negative 9%. It’s hard to reduce inventory for small businesses when there are few or no customers. The net percent of owners viewing current inventory stocks as “too low” increased two points to 3%. The net percent of owners planning to expand inventory holdings increased from July by two points to a net 6%.
- The net percent of owners raising average selling prices rose three points to a net 1% seasonally adjusted. Sixteen percent reported lower average selling prices and 16% reported higher average prices. Price hikes were the most frequent in wholesale (24% higher, 22% lower). Price cuts were the most frequent in retail (11% higher, 24% lower). Seasonally adjusted, a net 16% plan price hikes.
- The service sector remains the missing link and is the key to stronger job growth going forward. Thirty-three percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up 3 points. Thirty-one percent have openings for skilled workers (up 4 points) and 12 percent have openings for unskilled labor (up 1 point). Twenty-six percent of owners reported few qualified applicants for their open positions (up 1 point) and 20 percent reported none (up 1 point).
- Retail sales were up but the performance was uneven. Sales at restaurants and bars rose, butremain 20% below February levels. The same holds for sales at clothing and accessories stores. Spending at home repair and garden stores surged in May and June but flattened in July. The consumption of goods already exceeds pre-pandemic levels, but services expenditures are lagging.
- “Small businesses are working hard to recover from the state shutdowns and effects of COVID-19,” said NFIB Chief Economist Bill Dunkelberg. “We are seeing areas of improvement in the small business economy, as job openings and plans to hire are increasing, but many small businesses are still struggling and are uncertain about what the future will hold.”
-Written by Kevin Sawyer
