Small Business Economic Trends
THE SMALL BUSINESS ECONOMY
1
Small Business Economic Trends
2
Small Business Economic Trends REAL GROSS DOMESTIC PRODUCT AND TOTAL NON-‐FARM EMPLOYMENT Employment
15,500
142,000 140,000
15,000
138,000
14,500
136,000
14,000 134,000
13,500
132,000
13,000 12,500
130,000
12,000
128,000
# of Non-‐farm Employees, in thousands
Chained Dollars (2009), in billions
16,000
GDP
00 01 02 03 04 05 06 07 08 09 10 11 12 13 Year 3
Small Business Economic Trends
CHANGE IN U.S. EMPLOYMENT: RECESSIONS
2 1960
0
1973
-‐2
1981
-‐4
2001
1990 2007
-‐6 -‐8
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72
Percent change from start of recession
4
Months from start of recession Source: Federal Reserve Bank of Minneapolis
4
Small Business Economic Trends
THE INDEX OF CONSUMER SENTIMENT 120 110
Index
100 90 80 70
14
12
10
08
06
04
02
00
98
96
94
92
90
88
86
84
82
50
80
60
Year Source: Thomson Reuters/ University of Michigan
5
Small Business Economic Trends
Source: United State Census Bureau, Survey of ConstrucXon (SOC) and the Building Permits Survey (BPS)
14
12
10
08
06
04
02
00
98
96
94
92
2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400
90
# of Units, in thousands
NEW PRIVATELY OWNED HOUSING UNITS STARTED
Year 6
Small Business Economic Trends
HOMEOWNERSHIP RATES 70 69
Percent
68 67 66 65 64
14
12
10
08
06
04
02
00
98
96
94
92
90
88
86
84
82
62
80
63
Year Source: Census Bureau
7
Small Business Economic Trends
SMALL BUSINESS OPTIMISM
INDEX AND COMPONENTS
8
Small Business Economic Trends SMALL BUSINESS OPTIMISM INDEX Based on Ten Survey Indicators (Seasonally Adjusted 1986=100)
•
110 105
95 90 85
from most current data point
13
11
09
07
05
03
01
99
97
95
93
91
89
87
85
83
81
79
75
77
80 75
Index
100
Year 9
Small Business Economic Trends
GOOD TIME TO EXPAND
Percent Next Three Months “Good Time to Expand” (Seasonally Adjusted)
25 20 15 10
14
12
10
08
06
04
02
00
98
96
94
92
90
88
86
84
82
80
78
0
76
5 74
Percent of Firms
30
Year
10
Small Business Economic Trends
BAD TIME TO EXPAND
Due to PoliXcal Climate 30
20 15 10
14
13
12
11
10
09
08
07
06
05
04
03
02
01
00
99
98
97
96
0
95
5 93 94
Percent of Firms
25
Year 11
Small Business Economic Trends
OUTLOOK FOR GENERAL BUSINESS CONDITIONS
70 60 50 40 30 20 10 0 -‐10 -‐20 -‐30 -‐40
74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14
Net Percent of Firms
Net Percent (“Be_er” Minus “Worse”) Six Months From Now (Seasonally Adjusted)
Year 12
Small Business Economic Trends
ACTUAL SALES CHANGES
Net Percent (“Higher” Minus “Lower”) Last Three Months Compared to Prior Three Months (Seasonally Adjusted)
20 10 0 -‐10 -‐20 -‐30 -‐40
74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14
Net Percent of Firms
30
Year
13
Small Business Economic Trends
SINGLE MOST IMPORTANT PROBLEM Financing and Interest Rates
40 30
Fed. Chairman Paul Volcker
25 20 15 10
14
12
10
08
06
04
02
00
98
96
94
92
90
88
86
84
82
80
78
0
76
5 74
Percent of Firms
35
Year
14
Small Business Economic Trends
PERCENT OF ALL FIRMS NOT WANTING A LOAN 55
Beginning of Recession
53 49 47 45 43 41 39
12
09
06
03
00
35
97
37 94
Percent of Firms
51
Year 15
Small Business Economic Trends
ACTUAL PRICE CHANGES
Net Percent (“Higher” Minus “Lower”) Compared to Three Months Ago (Seasonally Adjusted)
50 30 10
14
12
10
08
06
04
02
00
98
96
94
92
90
88
86
84
82
80
78
-‐30
76
-‐10 74
Net Percent of Firms
70
Year 16
Small Business Economic Trends
SINGLE MOST IMPORTANT PROBLEM InflaXon
45 40 Energy Crisis
30 25 20
Energy Spike
15 10
14
12
10
08
06
04
02
00
98
96
94
92
90
88
86
84
82
80
78
0
76
5 74
Percent of Firms
35
Year 17
Small Business Economic Trends
ACTUAL CAPITAL EXPENDITURES
Percent Making a Capital Expenditure During the Last Six Months
75 Leasing Added
70 Percent of Firms
65 60 55 50
13
11
09
07
05
03
01
99
97
95
93
91
89
87
85
83
81
40
79
45
Year 18
Small Business Economic Trends
SMALL BUSINESS & TRADE • 13% HAVE FOREIGN SALES, 29% OF MANUFACTURERS • FOR EXPORTERS, UNDER 5% OF SALES FOR 70% OF THE FIRMS • 32% CANADA, 14% ASIA, 13% MEXICO, 12% TO BRITISH ISLES • ONLY 12% MARKET REGULARLY OVERSEAS • 13% MADE PURCHASES DIRECTLY FROM OVERSEAS VENDORS, 25% IN MANUFACTURING • TRANSACTIONS COSTS ARE HIGH, BUT TECHNOLOGY AND TRANSPORTATION COSTS IMPROVING CAPABILITY • RANKS 75TH OUT OF 75 “MOST IMPORTANT PROBLEMS 19
Small Business Economic Trends
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Small Business Economic Trends
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