The National Federation of Independent Business (NFIB) Research Center released an industry-specific quarterly Small Business Economic Trends survey highlighting the construction, manufacturing, retail, and services industries. According to the report, the Optimism Index across the four reported industries decreased from the previous quarter. Despite this decline, optimism in the construction, manufacturing, and services industries was higher than that of the overall business community in April.
“Small business optimism declined in all four industry sectors, but most notably among small retailers and manufacturers largely due to more pessimistic views about future business conditions, supply chain disruptions, and ongoing labor quality concerns,” said Holly Wade, executive director of NFIB’s Research Center. “Despite the declines in Optimism as owners navigate the evolving business climate, at least 60 percent of small firms across all industries consider their business in excellent or good health.”
The survey was conducted in April and the overall Optimism Index in April was 95.8.
Key findings by industry include:
Construction
- In April, the Optimism Index for the construction industry was 100.9, down 3.9 points from January, the smallest change of all reported industries.
- Over half of small businesses in the construction industry reported unfilled job openings, the highest of all industries and 21 points higher than for all firms. Construction was the only industry with an increased level of unfilled job openings from the previous quarter.
- Fifty-six percent of construction firms reported few or no qualified applicants for their open positions, up five points from the previous quarter, and nearly a third reported labor quality as their single most important problem.
Manufacturing
- The Optimism Index for the manufacturing industry was 6 in April, down 6.8 points from January, but still higher than that of the overall small business community and above the overall 51-year average of 98.
- The percent of manufacturing firms expecting real sales to improve fell 12 points from January to a net 9 percent (seasonally adjusted).
- In April, a net 15 percent (seasonally adjusted) of small business owners in the manufacturing industry expect the economy to improve.
Retail
- The Optimism Index for the retail sector fell 6.4 points from January to 93.7. This sector exhibited the lowest level of optimism among the four reported industries and the only industry with an Optimism Index lower than that of the overall small business community.
- The retail industry had the lowest percent of small businesses with hiring plans.
- In April, a net negative 14 percent (seasonally adjusted) of retailers reported current inventory levels as “too low”, down six points from January and eight points lower than the aggregate reading of all firms. This was the worst reading of all industries.
Services
- In April, the Optimism Index for the services industry was 98.6, down 4.5 points from January. This decline was mostly due to a weakening in the outlook for general business conditions.