Small-business employment is better than it was a year ago, but not enough to
restore 2007-level hiring. Uncertainty remains throughout the sector, as
small-business owners brace for the possibility of increased taxes, new
regulations and higher health-care costs.
State-specific data isn't available, but Kim Clarke Maisch, state director of
NFIB/Illinois, said small-business owners here are as wary as those elsewhere in
the country. "The numbers could be worse, but they should be a lot better," she
said. "We're still not back where we were before the recession, and there's a
lot of uncertainty among small-business owners over where the economy is
Bill Dunkelberg, NFIB's chief economist, said: "The year is not ending on a
high note in the small-business sector of the economy. The 'bifurcation'
continues, with the stock market hitting record high levels but the
small-business sector showing little expansion beyond that driven by population
"There is also a hint that employers are getting an inkling of what Obamacare
might mean for labor costs. Concern about the cost and availability of insurance
bumped up 3 percentage points after a long period of no real change.
Small-business owners who provide health insurance may soon find that their
plans are 'unacceptable' to Obamacare and be obliged to either pay more for the
coverage or abandon it and pay the benefit in cash. This will be a major source
of angst and uncertainty in 2014."
A review of the November indicators is as follows:
increased employment by a seasonally adjusted average of 0.05 workers per
firm in November, which is half the October figure, but positive. Seasonally
adjusted, 14 percent of the owners, up 2 percentage points, reported adding
an average of 3.7 workers per firm over the past few months. Offsetting
that, 12 percent, up 3 points, reduced employment an average of 3.4 workers,
producing the seasonally adjusted gain of 0.05 workers per firm overall. The
remaining 74 percent of owners made no net change in employment. Fifty-one
percent of the owners hired or tried to hire in the last three months, and
44 percent reported few or no qualified applicants for open positions.
Twenty-three percent of all owners, up 2 points, reported job openings they
could not fill in the current period — a positive signal for the
unemployment rate and the highest reading since January 2008. Thirteen
percent reported using temporary workers, down 2 points from October.
Hard-to-fill job openings.
adjusted net percent of all owners reporting higher nominal sales in the
past three months compared with the prior three months was unchanged at a
negative 8 percent. Fifteen percent still cite weak sales as their top
business problem. The net percent of owners expecting higher real sales
volumes rose 1 point to 3 percent of all owners, after falling a seasonally
adjusted 6 points in October — a weak showing. Not much help for hiring or
inventory investment in those numbers.
[to top of second column]
Earnings trends deteriorated a bit in November,
falling to a net negative 24 percent. If these were publicly
traded companies, the stock indexes would not look good. The
economy remains bifurcated, with large firms doing fairly well
and small businesses showing little growth or improvement. Three
percent reported reduced worker compensation, and 16 percent
reported raising compensation, yielding a seasonally adjusted
net 14 percent, down 2 points, reporting higher worker
compensation. A net seasonally adjusted 14 percent, up 4 points,
plan to raise compensation in the coming months. Overall, the
compensation picture remained at the better end of experience in
this recovery, but historically weak for periods of economic
growth and recovery. With a net 14 percent raising compensation
but a net 2 percent raising selling prices, profits will
continue to be under pressure.
Credit continues to be a nonissue for small employers, with just
4 percent of the owners reporting that all their credit needs
were not met, down 2 points. Thirty-two percent reported all
credit needs met, and 52 percent explicitly said they did not
want a loan. Twenty-nine percent of all owners reported
borrowing on a regular basis, up 1 point but a near-record low.
The average rate paid on short maturity loans was steady at 5.4
The frequency of
reported capital outlays over the past six months fell 2 points
to 55 percent, stuck in the "mid-50s" since recovering in 2012
from the lows of 45 reached in late 2009 and early 2010. The
small-business sector appears to still be in "maintenance mode,"
with little expansion planned in the future. The percent of
owners planning capital outlays in the next three to six months
rose 1 point to 24 percent. Capital spending is at its highest
point since early 2008 but has been stuck well below normal
levels for several years, threatening the improvements in
productivity needed to raise real wages.
The report released this week is based on the responses of 762
randomly sampled small businesses in NFIB's membership, surveyed
throughout the month of November. Download the complete study at
All net percentages are seasonally adjusted unless otherwise
noted. The net percentage is the percent with a favorable response
less the percent of owners with an unfavorable response.
[Text from file received from
National Federation of
Independent Business, Illinois]
The National Federation of Independent
Business is the nation's leading small-business association. A
nonprofit, nonpartisan organization founded in 1943, NFIB represents
the consensus views of its members in Washington, D.C., and all 50
state capitals. The NFIB Research Foundation conducts some of the
most comprehensive research of small-business issues in the nation.
NFIB's Small Business Economic Trends is a monthly survey of
small-business owners' plans and opinions. Decision-makers at the
federal, state and local levels actively monitor these reports,
ensuring that the voice of small business is heard.