Small business jobs in Chicago increase a bit
Posted on March 12, 2013
Although not back to pre-recession levels, the small business jobs in Chicago are increasing, and nationwide they are increasing on a cellular level. This is according to the National Federation of Independent Business.
Their survey was just released and shows that the NFIB Index of Small Business Optimism increased 1.9 points in February, to 90.8.
It’s an improvement over the last several reports, but the Index remains on par with the 2008 average and below the trough of the 1991-92 and 2001-02 recessions.
Of the ten Index components, one fell, one remained unchanged and eight improved. Most notably, the gains in capital spending and inventory investment plans were large.
Weak sales is still the top business problem for 18 percent of owners. The net percent of all owners (seasonally adjusted) reporting higher nominal sales over the past three months was unchanged in February, at a negative 9 percent.
There are still far more owners reporting declining sales than reporting positive sales trends. Seasonally unadjusted, 19 percent of all owners reported higher sales (last three months compared to prior three months, unchanged) and 33 percent reported lower sales (up 1 point).
Consumer spending remains weak, especially on services although durable goods sales have recently shown some strength. The net percent of owners expecting higher real sales volumes rose 2 points to 1 percent of all owners (seasonally adjusted), 11 points below the 2012 cycle high of a net 12 percent reached in February, 2012. Not seasonally adjusted, 33 percent expect improvement over the next three months (up 8 points) and 24 percent expect declines (down 8 points).
“While the Fortune 500 are enjoying record high earnings, Main Street earnings remain depressed. Far more firms report sales down quarter over quarter than up,” said NFIB chief economist Bill Dunkelberg. “Washington is manufacturing one crisis after another—the debt ceiling, the fiscal cliff and the sequester. Spreading fear and instability are certainly not a strategy to encourage investment and entrepreneurship. Three-quarters of small-business owners think that business conditions will be the same or worse in six months. The Index gained almost 2 points last month; that was good news. But, until owners’ forecast for the economy improves substantially, there will be little boost to hiring and spending from the small business half of the economy.”
Small business demand for credit remained weak in February, given the weak economy. Only 7 percent of owners surveyed reported that all their credit needs were not met, up 1 point but only 3 points above the record low. Twenty-nine percent reported all credit needs met, and 51 percent explicitly said they did not want a loan (64 percent including those who did not answer the question, presumably uninterested in borrowing as well). Only two percent of owners reported that financing was their top business problem.