New NFIB Report: Industry-Specific Small Business Economic Trends Survey

Date: May 18, 2022

Survey provides updates on the construction, manufacturing, retail, and services industries

WASHINGTON, D.C. (May 18, 2022) – The NFIB Research Center today released an industry-specific Small Business Economic Trends report highlighting the construction, manufacturing, retail, and services industries. The overall Optimism Index for small businesses in April was 93.2.

“The construction and manufacturing industries are especially feeling the impact of inflation pressures,” said Holly Wade, Executive Director of NFIB’s Research Center. “Optimism among these industries varies due to their unique set of circumstances and the degree to which inflation, supply chain disruptions, and a staffing shortage are impacting their business.”

Key findings by industry include:

Construction

  • The Optimism Index for the construction industry was 92.3, down seven points from January’s quarterly report and lower than the overall Index.
  • Owners in the construction industry had the highest percentage of unfilled job openings among all industries at 59%.
  • The struggle to hire qualified workers has led to an inability to form work teams and begin permitted projects to meet the current demand.
  • Fifty-four percent of the job openings in construction are for skilled workers.
  • Sixty-four percent of construction firms reported few or no qualified applicants.
  • Eighty-one percent of construction firms reported raising prices in April.
  • Earnings trends in construction improved by five points from the previous quarter to a net negative 20%.

Manufacturing

  • The manufacturing sector remains more optimistic compared to other industries in its recovery from the pandemic, with the Optimistic Index at 99.1 in April.
  • Fifty-three percent of manufacturing firms reported unfilled job openings, second only to the construction industry and six percentage points higher than all firms.
  • A net 28% of firms plan to create new jobs in the next three months, down seven points from January but eight percentage points higher than the overall population of small firms.
  • Future sales expectations declined 10 points in April from January’s report, however, owners in manufacturing are still more optimistic than all firms about sales over the next three months.
  • A net negative 2% of manufacturing small business owners expect higher sales in the next three months, compared to a net negative 12% overall.

Retail

  • Retailers reported nearly the same level of optimism as the average for all firms in April with an Optimism Index of 93.4.
  • Earnings trends in retail fell three points from the previous quarter to a net negative 18%.
  • Retail owners’ expectations about economic conditions over the next six months declined 18 points to a net negative 47%.
  • A net 8% of retailers report current inventory levels “too low” compared to a net 6% of all small businesses.
  • Retailers continue to increase inventory levels and a net 5% plan to increase inventories over the next three to six months, four points above all firms.

Services

  • The services sector Optimism Index decreased in April by 2.6 points to 94.2 and is one point above the overall index.
  • Most of the decline in service sector optimism was driven by a decrease in expectations that the economy will improve and expectations of real higher sales.
  • Service businesses’ expectations about future sales over the next three months fell seven points from January to a net negative 9% of owners.

The full report is available here.

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