Business Owners Expect Hiring, Sales Increases
BY Angus Loten
Nov. 9, 2005--In the last few months alone, Kurt Summer has near doubled his staff -- and the hirings just keep on coming.
"We trimmed back during the downturn three years ago," said Summer, owner of Austin Generator Services, based in Austin, Texas. "Now every segment of our business is on the rise, and we need more people."
Today, he has 12 employees, but will soon need even more. "I'm expecting a three-to-five year growth spurt and shopping around for a larger property."
And he's far from alone, according to a new survey. Despite catastrophic storms, high energy costs, and gloomy consumer surveys over the past several months, more small firms are planning to create new jobs than at any time since the dot-com boom, the National Federation of Independent Business reported Tuesday.
A full 52% of the more than 1,000 member companies surveyed by the Washington-based small-business group either hired or tried to hire additional staff in October, setting an average employee increase per firm of 0.46, a survey record. Only 8% reported cutbacks.
"The job creation outlook is very good and the fourth quarter should produce solid employment gains," William Dunkelberg, NFIB's chief economist, said in a statement.
Gains on the job front largely reflected stronger sales, the survey showed, with quarter-over-quarter sales figures jumping nine points last month, with a net 14% of all firms reporting increases, including almost half of all manufacturing firms surveyed. About two-thirds attributed better earnings to higher sales, though firms in every industry were also raising prices, according to the survey.
The buoyant mood, which boosted the group's optimism index by 3.7 points last month, to 103.7, saw many owners anticipating higher sales, better earnings, and even more jobs in the fourth quarter. It also seems to indicate that the Gulf Coast storms had minimal impact on the nation's overall small-business sector, according to NFIB.
Summer, whose firm repairs power generators, was among a number of small companies that actually saw a short-term spike in business following Hurricane Katrina. "September and October were huge months for us," he said. "We're not getting hurricane business anymore, but the long-term outlook is still very strong. The economy has been ramping up for the last 20 or so months and we're seeing the affect of that."
Since January, the NFIB index has hovered above 100, a benchmark reading, except a brief dip to 99.8 in April. The October survey is based on 1,116 responses from a random sample of NFIB's 600,000 members.
Six of 10 index components were up last month, including a surge in the number of owners expecting higher sales, up a full 21 percentage points over September, to 38%.
The number of owners forecasting better business conditions was also up, by 11 percentage points to 14%.
Small businesses also continued to spend in October, the survey showed. Two-thirds of owners reported capital outlays, with about half buying new equipment. The median outlay was $22,000. Overall, 22% said they felt it was a good time to expand facilities.