The Great Recession officially ended June 2009 in the U.S. Since then, the economic recovery has plodded along slowly. Nearly five years later, the snail’s pace continues, with small business optimism crawling along with it.
The National Federation of Independent Business (NIFB) Research Foundation released its latest report on Small Business Economic Trends Feb. 4. The small business optimism index was up 1.4 points in December to 93.0, but below the precious three mid-year readings of over 94 and 6 points below the prerecession average.
But there are some encouraging trends to report: “Capital spending rose significantly in December, increasing by 9 points from November, and job creation among NFIB firms was the best since February 2006. Hopefully, the promising NFIB job creation and capital spending numbers for December forecast a better 2014.”
Commenting on the report, NFIB Chief Economist Bill Dunkelberg said, “While there has been no sign that a real recovery has begun, we can be encouraged that the economy is at least crawling forward and not heading in reverse,” said. “Some segments of the economy are showing improvement (manufacturing, construction, professional services), but consumer spending, especially on services (70 percent of consumption), has lagged. Spending on items such as automobiles has certainly increased, however a corresponding rise in hiring has not yet materialized.
“Two monthly advances could be the start of a more positive trend, but there are many threats to improvement, including the majority of respondents feeling the current climate is not ‘a good time to expand substantially’ blaming the political climate, something that may not improve in an election year. Obamacare will continue to generate issues for small business owners as well as individual consumers. And the national debt continues to rise with another fight to increase the debt ceiling looming once again. The uncertainty that has contributed to our slow recovery is clearly still present — making any advances shaky at best.”
The in-depth report includes a section devoted to survey takers’ single most important problem. Taxes ranked No. 1, followed by government regulations and red tape; poor sales; cost and availability of insurance; labor costs and inflation; and finances and interest rates.
Regarding small business job creation, the report said, “Forty-eight (48) percent of the owners hired or tried to hire in the last three months, and 38 percent reported few or no qualified applicants for open positions. This is not just a skills issue, but one of poor attitudes, work habits, timeliness, appearance and expectations, especially among the applicants for lower skill jobs.
“Twenty-three (23) percent of all owners reported job openings they could not fill in the current period (unchanged), a positive signal for the unemployment rate and the highest reading since January 2008. Fourteen (14) percent reported using temporary workers, up 1 point from November.
“Job creation plans fell 1 point, falling to a net 8 percent, but maintaining the improved level of plans recorded last month. Overall, it appears that owners hired more workers on balance in December than their hiring plans indicated in November, a favorable development.”
In the next few weeks, thefabricator.com will be reporting on some small metal fabricating businesses featured several years ago in The Fabricator Spotlight. How have they weathered the recession, and where are they now in relation to where they were when their profiles were first published? We will let you know how optimistic these business owners are about their economic future.
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