AT Business Confidence DA - Michigan 7 2023 CPSW

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Business Confidence Low - Indexes
Business Confidence is low - most recent index data
Anne Petrik 6-2, Vice President of Research for Vistage, “Small Business Confidence in the Economy Hits Record Low,” June 2, 2023. https://www.vistage.com/research-center/business-financials/economic-trends/20230602-small-business-confidence-erodes-wsj-survey/, KPR
Only twice in the nearly 11-year history of the WSJ/Vistage Small Business CEO Confidence Index has sentiment about the future of the U.S. economy been worse. The Index dropped to 73.3, falling 7% compared to last month, making it the lowest reading since the COVID-19 pandemic shutdown in June 2020. Small business confidence about the future of the U.S. economy fell nearly 24% in the same time period; just 8% of small businesses believe the economy will get better, while a staggering 57% believe it will worsen.
Highlights of the data — informed by 499 leaders of small businesses that responded to the May WSJ/Vistage Small Business CEO Confidence Index survey in the field May 1-8, 2023 — include:
· Current Economy: Just 11% of small businesses believe the economy has improved over the last year, while 54% report it has worsened.
· Future Economy: Just 8% of small businesses believe the economy will get better over the next 12 months, while 57% think it will worsen, a steep month-over-month decline and record low.
· Revenue projections: The proportion of small businesses (48%) expecting increased revenues declined 7 points since last month. Meanwhile, 16% expect decreased revenues in the year ahead. This figure has held steady since late last year.
· Profitability projections: Another key driver of the decline in the Index, the proportion of small businesses expecting increased profits (36%) dropped 8 percentage points from last month, falling back to levels recorded last November.
· Fixed investment plans: Small businesses are focused on cost control with 2-in-10 reporting their fixed investments will decrease over the next 12 months and 49% not making any changes to their plans.
· Workforce expansion plans: Workforce velocity slows; BLS data shows that quit rates are on the decline, and the May survey revealed that the proportion of small businesses expanding their workforce declined 8 points.
In addition to the six components that comprise the Index, the survey captured small business sentiment on how they are addressing hiring and cost management, which are top areas of focus for small businesses:
· Higher interest rates are impacting more than half (53%) of small businesses surveyed.
· Nearly half of small businesses moderately to strongly agree that their cash flow is significantly impacted by accounts receivable.
· Capital investment plans remain intact, with 60% of small businesses reporting no changes to their plans.
Multiple indexes prove confidence low now
BusinessWest Staff 6-8. A team of highly qualified writers and editors. “Business Confidence Enters Pessimistic Territory.” Business West. June 8, 2023. https://businesswest.com/blog/business-confidence-enters-pessimistic-territory/. RW
BOSTON — Massachusetts employers turned pessimistic about the economy for the first time since December 2020 last month as the state economy slowed to a crawl and the Federal Reserve continued to raise interest rates.
The Associated Industries of Massachusetts (AIM) Business Confidence Index lost a half-point to 49.6 in May, just below the 50 mark that separates optimistic from pessimistic outlooks. Confidence ended the month 5.1 points lower than a year earlier.
The survey was largely completed before President Joe Biden and House Speaker Kevin McCarthy struck a deal to raise the nation’s debt ceiling and avert a U.S. default.
“MassBenchmarks reports that the Massachusetts economy was essentially flat in the first quarter, growing at a 0.1% annual rate versus 1.1% for the nation. Employer confidence is reflecting that slowdown,” said Alan Clayton-Matthews, professor emeritus of Economics and Public Policy at Northeastern University. “At the same time, payroll employment remained strong in the first quarter, and unemployment rates remained low at 3.3% in April.”
The AIM Index, based on a survey of more than 140 Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative.
The Central Massachusetts Business Confidence Index, conducted with the Worcester Regional Chamber of Commerce, rose slightly from 50.3 to 50.4. The North Shore Confidence Index, conducted with the North Shore Chamber of Commerce, increased from 48.2 to 50.5. The Western Massachusetts Business Confidence Index, developed in collaboration with the Springfield Regional Chamber, fell to 45.7.
The constituent indicators that make up the Index were mostly lower in May. The confidence employers have in their own companies fell 1.4 points to 51.8, ending the month 6.8 points below May 2022.
The Massachusetts Index assessing business conditions within the Commonwealth rose 1.1 points to 49.7, down 4.1 from a year earlier. The U.S. Index measuring conditions throughout the country gained 0.2 points to 42.6, remaining in pessimistic territory for an eighth consecutive month.
The Current Index, which assesses overall business conditions at the time of the survey, fell 0.2 points to 51.3. The Future Index, measuring projections for the economy six months from now, lost 1.0 point to end the month at 47.8.
The Manufacturing Index dropped 2.2 points to 46.5, leaving it 8.0 points lower than a year ago. Confidence among non-manufacturing companies was up 0.7 points to 51.8. The Employment Index fell 0.8 points to 50.8. Large companies (50.8) were slightly more optimistic than medium-sized companies (50.2) and small companies (48.9).
Michael Tyler, chief investment officer at Eastern Bank Wealth Management and vice chair of the BEA, noted that “businesses have been stung by both stubbornly high inflation and persistently high interest rates, which have dampened demand and raised costs. It’s unfortunately not surprising that the Future Index indicates that business leaders expect these conditions to worsen further. Thankfully, a possible recession would likely be shallow and short, cushioned by a strong jobs market and healthy consumer spending.”
AIM President and CEO John Regan, a BEA member, added that employers will likely be encouraged in the coming months by the ability of Congress and the White House to reach an agreement on raising the debt ceiling.
“The President and Congress did the right thing in hammering out an agreement that will maintain the stability of the global financial system,” Regan said. “Employers need all the predictability they can get as the economy continues to slow down.”
Business Confidence Low - Inflation
Inflation destroying business confidence now
Sarah Lynch 6-13. Sarah Lynch is a staff reporter at Inc. In 2021, she graduated from Marist College with a B.A. in Communication, concentrating on Journalism and Public Relations. “Report: Small-Business Confidence Improved in May, but the Economic Outlook Is Still Challenging, Inflation and labor-quality challenges topped small-business owners' concerns--though some industries are struggling more than others.” INC. 6-13-2023. https://www.inc.com/sarah-lynch/report-small-business-confidence-improved-in-may.html. RW
Small-business confidence hit a decade low in April, and while May brought a slight rebound, their outlook remains far from rosy.
For the 17th straight month, the Small Business Optimism Index fell below the nearly 50-year average, according to the National Federation of Independent Business's latest report. The index increased from 89 in April to 89.4 in May--higher than The Wall Street Journal's 88.7 prediction, based on a poll of economists.
That said, a net negative 50 percent of small-business owners don't expect conditions to improve soon, a slight decline from April.
Inflation returned to the top of small-business owners' concerns: Twenty-nine percent say they have plans to increase prices, up eight percentage points from April's report. In May, 32 percent enacted price increases that month--the lowest percentage since March 2021, though "still an inflationary level," according to the report. Inflationary pressures also vary by industry: Businesses in retail, wholesale, and construction hiked prices more than others, according to the NFIB report.
The NFIB report comes the same day the latest Consumer Price Index from the Bureau of Labor Statistics shows consumer prices cooling. This could indicate some upcoming relief for small businesses, even if they aren't yet feeling it.
Small businesses are still hiring and planning to create new jobs--up 3 points and 2 points from April, respectively--echoing the jump in jobs added in the Bureau of Labor Statistics' May jobs report. Still, small-business owners face labor-quality issues, with 55 percent of owners reporting few or no qualified applicants for their positions, unchanged from April. In May, labor quality closely followed inflation as the number two concern for small-business owners overall. "The difficulty in filling open positions is particularly acute in the construction, transportation, and manufacturing sectors where compensation gains are more frequently reported," NFIB chief economist Bill Dunkelberg said in the report. The wage pressure is still on as well, with a slight increase in the small businesses raising compensation in May. But with the deceleration in average hourly earnings in the May jobs report and signs of wage growth slowing in Indeed job postings, that tension may be easing--if slowly. One uplifting indicator: A quarter of small-business owners are planning capital outlays--or money spent on capital assets--in the coming months. This index component had the largest increase from the April report, up six points, which the report deemed "a very positive move but historically low." It's clear small businesses will still see gray skies for a while. "Overall, small-business owners are expressing concerns for future business conditions," Dunkelberg said.
Business confidence low - high inflation and interest rates, and is expected to get worse
Matthew Medsger 6-29. Matthew Medsger is a Boston Herald reporter covering politics. “Business confidence turns pessimistic for the first time since 2020.” Boston Herald, 6-29-2023. https://www.bostonherald.com/2023/06/05/business-confidence-turns-pessimistic-for-the-first-time-since-2020/. RW
Business confidence among the state’s employers fell last month to the lowest level seen since the height of the pandemic, according to a recent survey of Massachusetts employers.
The Associated Industries of Massachusetts, in its monthly Business Confidence Index, says Massachusetts business owners’ faith in the economy plunged half-a-point in May, dropping from 50.1% to 49.6% and continuing a downward trend that first began in November.
And while a half point may not sound like a lot, the move is significant as a reading below 50 indicates a pessimistic outlook.
“Massachusetts employers turned pessimistic about the economy for the first time since December 2020 last month as the state economy slowed to a crawl and the Federal Reserve continued to raise interest rates,” the survey reads, in part.
The index, taken well ahead of Friday’s unexpected report from the Bureau of Labor Statistics showing the economy had added a further 339,000 jobs and before President Biden’s negotiated deal to suspend the debt ceiling until 2025 had cleared Congress, reflects an ongoing concern among employers that the nation may be barreling toward economic recession or policy driven calamity.
“Businesses have been stung by both stubbornly high inflation and persistently high interest rates, which have dampened demand and raised costs. It’s unfortunately not surprising that the Future Index indicates that business leaders expect these conditions to worsen further,” Michael Tyler, Chief Investment Officer at Eastern Bank Wealth Management and Vice Chair of AIM’s Board of Economic Advisors said with the survey’s release.
“Thankfully, a possible recession would likely be shallow and short, cushioned by a strong jobs market and healthy consumer spending,” Tyler said.
Though circumstances may have seemed particularly dire to business owners as of last month, according AIM President John Regan, doing away with concerns of a U.S. default and the consequences of what might follow will hopefully put the minds of employers at ease.
“The President and Congress did the right thing in hammering out an agreement that will maintain the stability of the global financial system. Employers need all the predictability they can get as the economy continues to slow down,” Regan said.
Inflation wrecking small business confidence – worker supply
Romero 23. Reporter for Yahoo Finance – Bachelor’s in Finance from Baylor, “Small business confidence drops as inflation weighs on outlook,” 4/11/23, https://finance.yahoo.com/news/small-business-confidence-drops-as-inflation-weighs-on-outlook-151102617.html)//CG
Optimism among small business owners fell below a 49-year average in March as inflation, tighter credit conditions and difficulty finding workers weighed on outlook.
The National Federation of Independent Business' (NFIB) optimism index fell to 90.1 last month from 90.9 in February, the group said in a report Tuesday.
“Small business owners are cynical about future economic conditions,” NFIB Chief Economist Bill Dunkelberg wrote in the release. “Hiring plans fell to their lowest level since May 2020, but strong consumer spending has kept Main Street alive and supported strong labor demand.”
Inflation remained the single most important issue impacting small businesses, with 24% of business owners flagging this as the biggest operational problem facing their companies.
Meanwhile, labor was the second-biggest problem for small businesses, with 43% of all owners reporting that job openings were difficult to fill, the NFIB’s survey showed.
The concern comes as new federal hiring data released Friday showed that the labor market continues to add jobs at a strong pace. Employers added 236,000 jobs in March while unemployment stayed low at 3.5%.
According to NFIB's monthly jobs report, a seasonally adjusted net 15% of owners are planning to add new jobs in the next three months. Still, about 26% of owners said they got few or no qualified applicants for their open positions.
About 59% of small business owners reported hiring or trying to hire in March, down one point from last month, according to the NFIB survey. Yet, elevated labor costs have become a burden to small business operators, with 11% reporting the concern.
Separately, a net 42% of small business owners said they raised compensation while about 22% plan to increase compensation in the next three months.
As inflation is costing small businesses money, a net 37% of owners said they raised their selling prices, the lowest since April 2021. But some owners expect higher sales volume to deteriorate to a net 15% amid economic uncertainty.
Still, more small businesses reported having greater difficulty getting a loan in March after multiple bank failures led to tightening credit conditions. A net 9% said their last loan was harder to get than the previous time, up 4 percentage points from the previous month.
“The March survey ought to capture at least some of the impact of the banking crisis on small business owners’ confidence, and it’s not pretty; the decline in the headline index reverses the modest gain since the start of the year, and leaves it 12.4 points below its recent peak in June 2021,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote following the release.
“Small businesses are captives of their banks, and the overnight change in the way markets view regional banks means they have been catapulted into survival and liquidity mode. Lending growth was slowing long before SVB failed, but the declines in the March NFIB measures of current and expected credit availability means we have to expect much weaker lending numbers over the next few months,” he added.
Small businesses hit by inflation and interest rates now
Saraiva 6/13 – Augusta Saraiva is a reporter for Bloomberg News, and holds a master’s degree in political journalism and bachelor’s degrees in journalism and international relations, “US Small-Business Sentiment Remains Subdued on Sour Outlook,” 6/13/23, https://www.bloomberg.com/news/articles/2023-06-13/us-small-business-sentiment-remains-subdued-on-sour-outlook#xj4y7vzkg)//CG
US small-business sentiment in May held close to the lowest level in a decade on dimmer views about the outlook for sales, the economy and credit conditions.
The National Federation of Independent Business optimism index ticked up to 89.4 from an April reading of 89 that was the weakest since January 2013, the group said Tuesday.
A measure of sales expectations fell for a third month to the lowest since July. Sentiment about future business conditions also deteriorated and a gauge of expected credit conditions slid to the lowest level since the end of 2012.
While many larger companies have the wherewithal to navigate higher interest rates, stubborn inflation and persistent labor challenges, many small businesses are feeling the squeeze.
“Overall, small business owners are clearly in a recession mood, expressing great concern for future business conditions,” NFIB Chief Economist Bill Dunkelberg said in a statement. “Supply chain disruptions and labor shortages will continue to limit the ability of many small firms to meet the demand for their products and services.”
While fewer owners said they raised prices in the prior three months, a greater share plans to boost them. A larger share also reported boosting worker compensation.
Business Confidence Low – Supply chains
Business confidence low now---supply chain and labor market
Jennifer Nash, 6-13. Economic and Market Research Analyst at VettaFi, "NFIB Small Business Survey: Great Concern for Future Conditions," VettaFi, June 13, 2023. https://www.advisorperspectives.com/dshort/updates/2023/06/13/nfib-small-business-survey-great-concern-future-conditions
“Overall, small business owners are expressing concerns for future business conditions,” said Bill Dunkelberg, NFIB Chief Economist. “Supply chain disruptions and labor shortages will continue to limit the ability of many small firms to meet the demand for their products and services, while less severe than last year’s experience.” [Graph Omitted] NFIB Optimism components The first chart below highlights the 1986 baseline level of 100 and includes some labels to help us visualize that dramatic change in small-business sentiment that accompanied the Great Financial Crisis and now the COVID-19 pandemic. Compare, for example, the relative resilience of the index during the 2000-2003 collapse of the Tech Bubble with the far weaker readings following the Great Recession that ended in June 2009. A similar pattern happened beginning in 2019 and dropped drastically during the COVID-19 pandemic. Even after the bounce back, readings continue to drop.
Supply chain disruption thumps—decreased biz con across many industries
Journal Record Staff, 22, The Journal Record is a daily business and legal newspaper based in Oklahoma City. “Supply chain, worker issues affect business confidence, Journal Record,” 2-10-2022, https://journalrecord.com/2022/02/10/supply-chain-worker-issues-affect-business-confidence/, 6-29-2023)//Aalmand
The continuing double-whammy of supply chain breaks and too few people to fill jobs has diminished confidence among business owners and managers, according to a recent Harris Poll. The poll, commissioned by Oklahoma City-based Express Employment Professionals, concluded that a month int

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