small business Archives - Shopfloor

ADP: Manufacturing Hiring Picked Up in January

By | Economy, Shopfloor Economics | No Comments

ADP said that manufacturing employment growth picked up in January, with the sector hiring 15,000 workers for the month on net. It marked the fourth time in the past five months that manufacturers added workers, but firms in the sector lost 39,000 workers in 2016, according to ADP. (The Bureau of Labor Statistics has said that manufacturing employment declined by 45,000 workers last year in official data.) Manufacturers had been wary about adding to their workforces over much of the past year due to global headwinds and economic uncertainties. Hopefully, this latest release is the start of things turning around as we begin 2017 with improved signs of activity and business confidence. Indeed, job openings have remained elevated in recent months, suggesting that manufacturers are prepared to accelerate hiring and be less cautious with better demand and production figures. Read More

Timmons: President-Elect Trump Brings the Smackdown with McMahon Nomination

By | Communications, Presidents Blog, Shopfloor Main | No Comments

National Association of Manufacturers President and CEO Jay Timmons issued the following statement on the nomination of business executive Linda McMahon as administrator of the Small Business Administration:

“President-elect Donald Trump’s nomination of Linda McMahon is the type of ‘smackdown’ nomination manufacturers in America need. It says loudly and decisively that small businesses, and the manufacturers who are the backbone of the U.S. economy, are a top priority for President-elect Trump.

“From her entrepreneurial success at World Wrestling Entertainment to her unabashedly pro-growth U.S. Senate campaign, McMahon has shown throughout her career not only the fitness to lead but also the determination to build businesses and create jobs for all Americans. Her experience adds more muscle to President-elect Trump’s jobs team, as he tags yet another formidable champion for an economy that lifts everyone up and leaves no one behind.”


CONTACT: Jennifer Drogus, (202) 637-3090

ADP: Manufacturers Added 15,000 Workers in October

By | Economy | No Comments

ADP said that manufacturers added 15,000 net new workers in October, less than the increase of 33,000 observed in September. The sector has expanded its workforce for nine straight months, rebounding after the winter-related softness in January. Over that nine-month period, manufacturers have hired an additional 12,000 employees per month on average, or 99,000 increased workers year-to-date in the sector. Read More

Small Business Optimism Virtually Unchanged in August

By | Economy | No Comments

The National Federation of Independent Business (NFIB) said that small business owners’ sentiment declined marginally, down from 94.1 in July to 94.0 in August. This suggests that perceptions have not shifted much over the past few months, with the Small Business Optimism Index averaging 94.0 over the past four months (May to August). This compares to an average of 90.3 for the first four months of 2013 (January to April). So, while small businesses were more confident in August than earlier in the year, growth in optimism appears to have stalled more recently.

Beyond that, the index remains below 100, its threshold for stronger growth in the small business sector. This means that small business owners continue to worry about weaknesses in the economy. The last time the NFIB’s index has a reading over 100 was October 2006.

The percentage of respondents saying that the next three months were a “good time to expand” declined from 9 percent to 7 percent. Of those saying that it was not a good time for expansion, the economy and political environment were the main reasons. Respondents said that higher taxes were the “single most important problem,” cited by 23 percent of those taking the survey. This was followed by government regulations (21 percent) and poor sales (17 percent).

On this latter item, those surveyed suggested that both earnings and sales were lower in the prior three months, with both figures dropping sharply in August. For instance, the net percentage of actual sales (e.g., those saying it was higher minus those saying it was lower) declined from -7 percent in July to -24 percent in August. The good news was that respondents were more positive about the next three months, with the net percentage of sales expectations increasing from 7 percent to 15 percent.

Employment followed a similar pattern. Over the past three months, the net percentage of actual hiring declined from -1 percent to -3 percent. Yet, net hiring expectations for the next three months were more upbeat, up from 9 percent to 16 percent.

Chad Moutray is the chief economist, National Association of Manufacturers.

Small Business Owner Sentiment Edged Slightly Lower in June

By | Economy | No Comments

The National Federation of Independent Business (NFIB) said that small business owners’ sentiment declined slightly, down from 94.4 in May to 93.5 in June. Even with this month’s lower figure, it is clear that small businesses have become more optimistic in the past few months, with an average Small Business Optimism Index of 93.3 in the second quarter of 2013 versus an average of 89.7 in the first quarter. This could suggest an upward trend. But, we should also caution that the index’s average in the first half of 2012 was also 93.5, but it declined significantly in the second half of the year to 90.9 as we approached the fiscal cliff and had slower sales growth both domestically and globally.

This is not to suggest that we will have a similar fate this year, as other surveys have indicated some cautious optimism about the second half of 2013. Still, the data show that uncertainties continue to persist for small business leaders. The net percentage of respondents expecting sales to increase over the next three months fell from 8 percent to 5 percent, with continued weakness in earnings. In addition, the net percentage saying that the next three months are a good time to expand dropped from 8 percent to 7 percent. (It is still higher than the 4 percent observed in April.)

The main reasons cited for those suggesting that the next three months were not a good time to expand were economic conditions and the political climate. The single most important problems in this survey were taxes and government regulations, with each garnering 20 percent of the responses. The next closest concern was poor sales, a proxy for the economy.

The data did provide some positive news on hiring, which is welcome. The net percentage of those planning to add employees in the next three months increased from 5 percent to 7 percent, its fastest pace since August and a definite improvement from the zero reading in March.

Similarly, capital spending plans for the next three to six months were unchanged, with 23 percent of respondents planning to make a capital expenditure. This figure has averaged 23.3 percent so far in the first six months of 2013, marginally higher than the 22.2 percent average for all of 2012. This suggests a slight pickup in investment spending in recent months, starting with the February report.

Chad Moutray is the chief economist, National Association of Manufacturers.

Small Business Owner Optimism Improves, But Stays Sub-Par

By | Economy | No Comments

The National Federation of Independent Business said that small business owner confidence edged slightly higher to begin the new year. The Small Business Optimism Index rose from 88.0 in December to 88.9 in January. Nonetheless, it is hard to paint these figures in a positive light, particularly with low readings for three straight months. In October, the index stood at 93.1 before plunging to 87.5 in December. Recent gains still suggest sub-par levels of optimism, with owners remaining anxious about the economic and political environment.

There was a net percentage of 6 percent of respondents suggesting that the next three months were a good time to expand. Of those saying tht it was not a good time, economic and policy concerns were most pressing. Indeed, the most important problems — each garnering 21 percent of responses — were taxes and government regulations. The tax challenge that confronts many small business owners would be the higher tax rates faced by many of them resulting from the fiscal cliff deal. Poor sales were cited by 19 percent.

Many of the key indicators remain weak, even as some of them had marginal improvements for the month. For instance, the net percentage of those experiencing sales gains in January was -9 percent, a slight bit of progress from the -15 percent and -10 percent levels seen in the prior two months. Similarly, the percentage of respendents expecting the economy to improve stayed extremely low (-30 percent), and measures for earnings, prices, hiring, and capital spending continue to be sluggish.

Overall, the NFIB data indicate that small business owners remain pessimistic in January. Given the important role that small firms play in our nation’s economy, that is a troubling sign. Historically, Optimism Index readings of 100 or more were consistent with a healthy and growing small business sector, and we remain well below those levels.

Chad Moutray is the chief economist, National Association of Manufacturers.

Small Business Confidence Higher in October, But With Persistent Sales Concerns

By | Economy | No Comments

The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index edged slightly higher in October, up from 92.8 in September to 93.1 in October. Even with the higher confidence level, small business owners remain anxious about the current economic environment. The net percentage of respondents saying that the next three months would be a good time to expand was unchanged at 7 percent. Of those saying that it was not a good time, the main reasons were economic conditions and the political climate. The latter answer is most likely a proxy for the election and the fiscal cliff.

Adding to these worries, small business sales have been moving in the wrong direction since June. The net percentage of owners reporting actual sales increases versus decreases has been negative since then, and it was -15 percent in October. In addition, earnings levels also remain weak, hiring intentions continue to be low, and firms’ ability to raise prices appears to be constrained. Just 22 percent of owners plan to make capital expenditures in the next three to six months.

Along these lines, the single most important problem – cited by 22 percent of respondents – was poor sales. This was followed closely by taxes (20 percent) and government regulations and red tape (19 percent). The inability of political leaders to solve the fiscal cliff is more than likely a major factor in both rising uncertainties regarding the future as well as the fact that “taxes” continue to be cited as one of the more pressing concerns.

In short, the NFIB survey provides us with a mixed bag of economic news as it pertains to small business owners. On the one hand, whether you compare to the last few months or last year, small business confidence has clearly risen. In October 2011, for instance, the Small Business Optimism Index stood at 90.2. Yet, it is also clear that owners remain anxious, with slowing sales and worries about the fiscal cliff. The Index was 94.5 just six months ago (April), and we remain well below the threshold of 100 which would indicate a growing small business sector.

Chad Moutray is the chief economist at the National Association of Manufacturers.

Small Business Confidence Continues to Rise

By | Economy, Studies and Reports | No Comments

The National Federation of Independent Business released is monthly Small Business Economic Trends this morning, with Small Business Optimism rising from 92.0 in November to 93.8 in December. It was the fifth consecutive monthly gain, up from 88.1 in August.

Along with the gain in confidence, the net percentage of respondents saying that the next three months are a “good time to expand” has increased to 10, its highest level since before the recession. Likewise, small business owners are also more optimistic about future sales, employment and capital spending.

Nonetheless, it is important to note that small businesses remain anxious despite these improvements. Traditionally, small businesses are experiencing strong growth once the Optimism Index exceeds 100 – a threshold that it has not surpassed since 2006. Moreover, of those suggesting that now is not a good time for expansion, poor economic conditions and an unsettling political climate are cited. The single most important problem continues to be “poor sales” followed by taxes and government regulations.

Chad Moutray is chief economist, National Association of Manufacturers.

Small Businesses Remain Wary About the Economy

By | Economy, Small Business | No Comments

Despite some progress in overall economic conditions since the recess, small business owners remain anxious about the economy. These concerns have had real impacts on the smaller firms’ willingness to invest in their businesses, hire additional workers, or seek additional capital.

Given that smaller businesses have traditionally led economic growth coming out of a recession, the fact that this is not happening this time around is hampering employment and economic growth. Two recent surveys have highlighted this fact.

First, the U.S. Chamber of Commerce conducted it’s annual Small Business Outlook Survey. Nearly half of small businesses, defined as those with under $25 million in annual sales, felt that economic uncertainty was their top concern. Other top challenges included fiscal efforts to address the federal deficit and debt, government regulations and the Health Care law.

In addition, 64 percent intended to keep the same number of employees over the next year, with 19 percent planning additional hiring. Interestingly, despite negative views on the national economy, almost two-third report that their own businesses are “on the right track.”

Earlier today, the National Federation of Independent Business released its Small Business Optimism Index, which fell from 90.9 in May to 90.8 in June. While virtually the same as the previous month, the index reflects continued wariness on the part of small business owners. Over half of the respondents who suggested that the next six months were not a good time to expand, said that economic conditions were the reason. The top concern remains “poor sales.”

Chad Moutray is chief economist, National Association of Manufacturers.

Newly Serious Budget Debate or Same Old Talking Points?

By | Energy, Taxation | One Comment

Budgets and deficits and debt dominated the Sunday TV news-chat shows, and the partisans brought us a mixture of principled arguments and same old talking points.

Unfortunately, Sen. Charles Schumer (D-NY) favored the latter in his appearance on CBS’ “Face the Nation.” From the transcript:

SENATOR CHARLES SCHUMER: You need to share sacrifice. And we believe that, for instance, defense cuts should be greater than Ryan proposed. You can’t– there’s waste there like everywhere else. And even more importantly there have to be revenues. If you’re going to reduce the deficit, how do you allow the oil companies to get huge subsidies? Which was based on a time when oil was seventeen dollars a barrel not a hundred? How do you give tax breaks for multimillionaires and companies that send jobs overseas and yet decimate middle class programs? So it’s got to be–
BOB SCHIEFFER (overlapping): You’re– you’re– you’re talking–
SENATOR CHARLES SCHUMER (overlapping): –fair. It’s got to be fair and across the board.
BOB SCHIEFFER: But you say it’s got to include revenues so you’re talking about raising taxes?
SENATOR CHARLES SCHUMER: Well, there are revenues in terms of oil company liabilities. There are revenues in terms of tax breaks to corporations that go all overseas. But I think many of us feel that tax breaks for millionaires is part of that shared sacrifice absolutely.

These were the same bogus arguments made against extending the 2001 and 2003 tax cuts last year, and Schumer’s attacks on “tax breaks for millionaires” are just a repeated bid for raising taxes on small business. Remember:

  • More than 70 percent of manufacturers file as pass-through entities and pay taxes at the individual rate. (See here and here.)

The accusations against oil companies are also old hat, as well as representing terrible tax, energy and economic policy. A study performed by Wood MacKenzie for the American Petroleum Institute last year reported, as per API: “Raising taxes on the industry with no increase in access could reduce domestic production by 700,000 barrels of oil equivalent a day (in 2020), sacrifice as many as 170,000 jobs (in 2014), and reduce revenue to the government by billions of dollars annually.”

Sen. Schumer’s policy prescriptions are not good, but what’s interesting is that they have also proved to be bad politics. Remember how the debate extending over the 2001 and 2003 turned out in last December’s lameduck session of Congress?

From The White House, Dec. 17, 2010, “The President Signs the Tax Cut & Unemployment Insurance Compromise: “Some Good News for the American People this Holiday Season.”