Construction, manufacturing, retail, and services industries say recovery is uneven, much work to be done
In a quarterly, industry-specific survey of the small business economy, responses from businesses in the construction, manufacturing, retail, and services industries echo NFIB’s latest survey on the impact of COVID-19.
“Small businesses are working hard to stay open while they continue to navigate the coronavirus pandemic,” says Holly Wade, NFIB Director of Research & Policy Analysis. “This report shows that some industries are recovering faster than others, but there is still much work to be done.”
The August 31 Small Business Economic Trends Industry-specific survey highlighted the construction, manufacturing, retail, and services industries. Key findings include:
Construction:
- The July Optimism Index for construction was 100.6, up 9.1 points from April’s quarterly report and 1.8 points higher than the overall Index of all firms.
- Demand for new construction has remained high and the industry has a better than average outlook than the rest of the economy.
- The demand for new workers in construction remains high as the industry had higher than average job openings and plans to increase employment.
- A net 24% plan to increase their workforce in the next three months.
Manufacturing:
- The July Optimism Index for manufacturing was 100.5, a 13.1 point increase from April.
- Earnings trends over the last quarter were weaker in manufacturing than other industries, a net negative 46% of firms experienced lower earnings over the last quarter.
- Future sales expectations rebounded, a 64 point increase since April to a net 17%.
- Sales growth will be the key driver of earnings changes and manufacturing firm owners are expecting a strong recovery from record low levels experienced earlier this year.
Retail:
- The July Optimism Index for retail was 99.9, closely tracking to the overall economy and 10 points better than the last quarter.
- A net 10% of retailers report current inventory levels “too low”, compared to only 1% of all small firms.
- Retailers plan to increase inventories more than the average as a net 13% plan to increase their current inventory levels.
Services:
- The July Optimism Index for services remains below the overall at 97.1; services have not recovered as much as other industries after a smaller decline in April then the rest of the economy.
- Owners became more optimistic about economic trends and decided they needed to “staff up,” increasing the percent of service firms with hiring plans.
- The service sector reported a 46 point increase in the net percent expecting higher real sales.
NFIB released a previous quarterly Industry-Specific report in May 2020.
NFIB’s latest survey on the impact COVID-19 has had on small businesses shows about one-in-five small business owners will have to shut their doors if current economic conditions do not improve over the next six months. In addition, 44% of small business owners surveyed said they would apply or re-apply for a second Paycheck Protection Program loan if eligible.
