Business Owners Optimistic

Business owners are optimistic about future business conditions and expect the recession to be short-lived, announced the National Federation of Independent Business (NFIB) last week.

The organization’s Small Business Optimism Index increased 3.5 points in May to 94.4, a strong improvement from April’s 90.9 reading. Eight of the 10 Index components improved in May and two declined. The NFIB Uncertainty Index increased seven points to 82. Reports of expected business conditions in the next six months increased 5 points to a net 34%, following a 24-point increase in April.

Said Montana State Director for NFIB Director, Riley Johnson, “It’s very encouraging to see eight of 10 index components having improved over the previous month’s findings, especially in the plans to increase employment and in the plans to increase inventory categories. It’s important to remember that this poll was taken before last Friday’s signing of the federal law giving more flexibility to small-business owners who took out Paycheck Protection Program loans. I see more than just a glimmer or two of hope for an improving economy, and, coronavirus willing, a speedier recovery than originally thought.”

NFIB Research Center has collected Small Business Economic Trends Data with Quarterly surveys since 1973 and monthly surveys since 1986. The sample is drawn from the membership files of the National Federation of Independent Business (NFIB). The SBET is one of the few archival data sets on small business, particularly when research questions address business operations rather than opinions. Today, it’s the largest, longest-running data set on small business economic conditions available.

“As states begin to reopen, small businesses continue to navigate the economic landscape rocked by COVID-19 and new government policies,” said NFIB’s Chief Economist Bill Dunkelberg. “It’s still uncertain when consumers will feel comfortable returning to small businesses and begin spending again, but owners are taking the necessary precautions to reopen safely.”

Real sales expectations in the next three months increased 18 points to a net negative 24%. Expectations about future sales are beginning to rebound after April’s lowest reading in survey history of a net negative 42%.

Fifty-two percent reported capital outlays in the last six months. Of those making expenditures, 35% reported spending on new equipment (down one point), 20% acquired vehicles (down one point), and 15% improved or expanded facilities (up two points). Five percent acquired new buildings or land for expansion and 10% spent money for new fixtures and furniture.

Twenty percent of owners are planning capital outlays in the next few months. Any extensive damage from recent protests will produce significant expenditures that were unexpected for some small business owners.

A net negative 19% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down eight points from April. Retail sales have declined significantly in the past three months. Consumer income was up significantly due to government programs assistance, but consumers, for the most part, could not get out to spend it unless they spent it online. The change in spending behavior produced a record-high savings rate of 33%. As the economy opens, this money will be spent.

Other key findings from the survey include:

—Earnings trends declined six points to a net negative 26%. Among owners reporting weaker profits, 46% blamed weak sales, 12% blamed usual seasonal changes, 9% cited price changes, 4% cited labor costs, and 4% cited material costs.

—Five percent of owners reported thinking it’s a good time to expand, up two points from April.

—The net negative percent of owners expecting higher real sales volumes improved 18 points to a net negative 24% of owners.

—A net 14% (seasonally adjusted) reported raising compensation (down 2 points) and a net 10% plan to do so in the coming months (up 3 points).

As reported in last week’s monthly jobs report, the small business labor market weakened further in the February-April period, with May survey respondents reporting reducing employment by 0.17 workers per firm in the prior three months. Most of the workers that were displaced (about 80%) expect to be rehired according to the Bureau of Labor Statistics. However, generous unemployment benefits are making it harder for some firms to re-call workers and fill open positions.

Anderson Towing at 706 Central Ave. in  Billings has become a U-Haul neighborhood dealer to serve the Billings community.

Anderson Towing will offer essential services like U-Haul trucks, trailers, towing equipment, moving supplies and in-store pick-up for boxes.

Anderson Towing on Central owner Cameron Cochran is proud to team with the industry leader in do-it-yourself moving and self-storage to better meet the demands of Yellowstone County.

U-Haul has teamed with independent dealers to offer moving equipment since 1945. With the COVID-19 outbreak creating challenging times for small businesses, more than 20,000 dealers across the U.S. and Canada are creating supplemental income through their U-Haul partnership. When a customer rents from a U-Haul dealer, they are directly supporting an independent small business in their community.

As an essential service provider, U-Haul stores and dealers continue to serve the public. Their products are utilized by First Responders; delivery companies bringing needed supplies to people’s homes; small businesses trying to remain afloat; college students; and countless other dependent groups – in addition to the household mover.

U-Haul Truck Share 24/7 allows customers to create an online account and pick up their truck at any hour using only their smartphone with photo feature and GPS. Trained Live Verify agents interact with customers online, enabling them to skip the lines and go straight to their truck.

Reserve U-Haul products at Anderson Towing by calling (406) 545-1870 or visit https:// www.uhaul.com/ Locations/ Truck-Rentals- near-Billings- MT-59101.

By Colter Brown, Northern Ag Network

Lawmakers reached an agreement [last week] to allow agriculture to participate in the Small Business Administration’s Economic Injury Disaster Loan (EIDL) program. The agreement is part of a larger deal, a $484 billion coronavirus package to extend the Paycheck Protection Program (PPP). The agreement also includes funds for small lenders and community banks, funds for national coronavirus testing and funding for hospitals.

Previously, the Small Business Administration had deemed agricultural producers ineligible for the EIDL. Montana’s senatorial delegation pushed for the change to the SBA program. Senate Majority Leader Mitch McConnell credited Montana Senator Steve Daines and other senators from rural states for making it clear that farmers and ranchers are eligible for the program.

Earlier this month, Daines sent a letter to the Small Business Association urging them to grant farms, ranches, and agriculture businesses the opportunity to apply for the EIDL program. Upon passage of the bill, Daines commented that, “This is great news for Montana’s farmers and ranchers as they head into the spring planting season. Ensuring our farmers and ranchers have access to this program is critical to making sure they can continue to maintain our nation’s food supply chain during the Coronavirus outbreak.”

The $60 billion of funding, including an additional $10 billion for emergency EIDL grants, will replenish EIDL program for small businesses. This is in addition to the $10 billion Daines secured for EIDL in the Phase Three Coronavirus Economic Relief Package.

This is not Phase Four of Congress’ response to the coronavirus outbreak. This bipartisan deal is a boost in funding from the Coronavirus Economic Relief Package which was signed into law on March 27th, 2020 to protect public health, and provide relief for small businesses, workers and families.

Senator Jon Tester also pushed for the change to allow farms and ranches to qualify for the EIDL program. “Montana’s family farms and ranches are the lifeblood of our state’s agriculture, which is our state’s number one industry and is vital to rural communities across Big Sky Country,” said Tester. “The fact is our independent ag producers were just scraping by before this pandemic, so I fought to make sure this program was expanded to include them because these folks need certainty as we head into planting season. I am not going to let Washington leave rural America behind.”

The provision means ag businesses can now apply for low-interest loans through the program and may also qualify for the $10,000 emergency grants. To be eligible, ag businesses will have to show that they have been hurt by the economic downturn caused by coronavirus.