NFIB survey finds small manufacturers recovering from COVID-19 impact

Small manufacturers are gradually getting more optimistic as they recover from COVID-19-related business disruptions.

That’s just one of the findings in the NFIB Research Center’s latest quarterly Small Business Economic Trends industry-specific survey. 

The report highlights the construction, manufacturing, retail, and services industries. NFIB released previous reports in August and May 2020.

“This year has been challenging for small business owners as they manage their businesses in a time when the COVID-19 pandemic has led to a steady stream of state and local regulations,” Holly Wade, NFIB executive director of research, said in a release. “Each industry has been impacted differently from COVID-19. This survey highlights that industries, such as manufacturing, are recovering faster than other industries, including the services sector.”

The key findings on the manufacturing sector include the following:

• The Optimism Index in October was 103.1 in manufacturing, a 2.7 point increase from July, but slightly below the overall index of 104;

• The manufacturing industry is still recovering from supply-chain disruptions and business closures due to COVID-19;

• Earnings trends this quarter were “very strong” in manufacturing as a net- negative 4 percent of firms reported higher earnings over the last quarter, up 42 points from July’s quarterly report;

• Business owners in manufacturing are less optimistic about sales expectations in the fourth quarter;

• Only a net 8 percent of manufacturing firms expect higher sales, down 9 points from July and about the overall average;

• Manufacturing companies reported a decrease in future employment plans in October. A net 13 percent reported plans to increase their number of employees, down 13 points from July and 5 points below the overall average.

Construction firms have the highest measure of small-business optimism among the industries, the NFIB Research Center reports. The construction industry Optimism Index in October was 107, up 6.5 points from July’s quarterly report, and 3 points higher than the overall index of all firms. Demand for new construction continues to be driven by record-low interest rates and a shortage of inventory in the real estate market.

The full survey is available at https://assets.nfib.com/nfibcom/Industry-SBET-October-2020-FINAL.pdf