What Recession Small Businesses Are Doing Fine

September 19, 2019

There has been a lot of discussion about the recession recently, but small businesses don’t seem to listen to it to a large extent.

This is the conclusion of the National Association of Independent Businesses (NFIB). The latest small business optimism index released by the business group on Tuesday fell slightly. But don’t let that lie to you. The index – measured every quarter since 1973 and monthly since 1986 – is still very strong, among the top 15% of its historical level.

“Small business owners continue to invest, growth and hiring are at an all-time high, and we believe there is no indication of the upcoming recession,” said NFIB President and CEO Juanita D Duggan in a press release.

According to the report, small-capital capital expenditures show a strong improvement, with 59% of homeowners reporting capital expenditures and another 28% planning to plan capital expenditures in the coming months. The profit trend improved to the third highest reading in the history of the survey.

“The pessimism we see is contagious, even if the real economy is booming,” said William Dunkelberg, chief economist at NFIB. “Expectations may be infected and therefore may get worse. All discussions about the upcoming recession may create false realities, but it does not make it a reality. Despite headlines, Main Street continues to produce and maintain Strong momentum.”

But that’s not all. Also on Tuesday, the MetLife and the American Chamber of Commerce Small Business Index were released, and the index, which was first released in 2017 and measured small business confidence, hit a record high. About 56% of the small businesses surveyed said that the local economy is in good condition (5 percentage points higher than the previous survey), and 58% and 66% said that the economy and their business are in a “healthy” state. .

Of course, there are many challenges. Compensation costs continue to rise. Trade tensions and immigration chaos are creating uncertainty. Next year’s elections may have an impact on taxes, labor laws and capital investments. But now, finding talent in this low-employment economy remains the biggest obstacle for small business owners.

But these challenges don’t seem to affect their hiring plans. In fact, despite the current labor market tension, more than 40% of small business owners surveyed by human resources provider Oasis (a company owned by payroll giant Paychex) plan to recruit in the coming year, and more than one-third of small business owners According to a quarterly survey of 2,300 small business owners recently announced by CNBC, although the US government’s immigration policy has changed, business owners plan to increase the number of employees next year. According to the report, “the proportion of small business owners who are expected to have any impact on their business due to changes in immigration policies has barely changed in the past two years”. “Even if the fear of immigration soars, about six out of ten small business owners say they don’t think immigration policies will affect their business, just like the previous seasons.”

Of course, one day there will be a recession. Of course, we should pay close attention to the economy. But the smartest business leaders I know understand that economic data – moving up and down in any month – must be considered in its historical context. At the moment, small businesses seem to be doing very well. It is not the economy that causes us a headache, but to find good people to do all the work we are currently lined up.