“Small business owners in various industries continue to manage historic economic headwinds that are impacting their day-to-day business,” said Holly Wade, Executive Director of NFIB’s Research Center. “Each industry is handling a unique set of circumstances resulting in varying degrees of owner optimism.”
Key findings by industry include:
Construction
- The Optimism Index for construction was 91.3 in July, down 1.2 points from April’s quarterly report.
- Owners in construction had the highest percentage of unfilled job openings among all industries at 62%, up four points from April.
- Sixty percent of the job openings in construction are for skilled workers, up six points from last quarter.
- Sixty-seven percent of construction firms reported few or no qualified applicants, up three points from April.
- Seventy-three percent of construction firms reported raising prices in July, down eight points from last quarter but historically very high.
- Earnings trends in construction fell by two points from the previous quarter to a net negative 22%.
Manufacturing
- The manufacturing sector continues to be more optimistic compared to other industries, with the Optimism Index at 93.2 in July, 3.3 points above the overall optimism.
- Fifty-nine percent of firms reported unfilled job openings, second only to the construction industry and 10 percentage points higher than all firms.
- A net 28% of firms plan to create new jobs in the next three months, unchanged from April and eight percentage points higher than the overall small business economy.
- Future sales expectations declined 28 points in July from April’s quarterly report, a net negative 29% expecting higher real sales, historically a very poor reading.
Retail
- The retail industry exhibited a notably lower level of optimism than the average for all firms in July with an industry Optimism Index of 85.8, down eight points from April.
- Earnings trends in retail fell 15 points from the previous quarter to a net negative 33%.
- Retail owners’ expectations about economic conditions over the next six months declined seven points to a net negative 53%.
- Zero percent of retailers report current inventory levels “too low”, compared to 2% (net) of all small businesses.
- Retailers have decreased inventory levels, and a net negative 6% plan to increase inventories over the next three to six months, seven points below all firms.
Services
- The service sector Optimism Index decreased in July by two points to 92.2 and is 2.3 points above the overall index.
- Most of the decrease in the service sector optimism was driven by a decrease in expectations that the economy will improve and expectations of real higher sales.
- Service businesses’ concern about future sales over the next three months was unchanged from April at a net negative 8% of owners.
The full report is available here.
