Economic conditions are good for U.S. small business:
“Economic conditions for small business continued to be strong in the fourth quarter of 2004,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. “And for the year, GDP growth of 4.4 percent is good news for small business. In the fourth quarter alone businesses added over 600,000 net new jobs. The outlook for the small business economy remains bright.”
That’s according to the Quarterly Economic Indicators Report for the 4th Quarter of 2004. The report was issued by the U.S. Small Business Administration’s Office of Advocacy.
A reader emailed me recently asking the difference between the SBA’s Quarterly Indicators Report, and the NFIB’s Small Business Economic Trends Survey, which I wrote about on Friday.
The two are very different.
The SBA Quarterly Indicators Report is mainly a compilation of government (and a few other) statistics. It is primarily a backward-looking analysis. It measures how the economy and other factors affecting small businesses actually performed during the just-ended quarter.
The NFIB’s report, on the other hand, is a survey of small business owners themselves. It measures small business sentiment, i.e., how small business owners feel about the economic conditions they operate under and the outlook they have for their businesses, based on current sales, orders in the pipeline, etc. The NFIB’s report is designed to be more of a forward-looking report.
I use both reports for gauging trends in the small business marketplace. The SBA Quarterly Indicator Report gives me the big picture about the crucial role small business plays in the overall U.S. economy. The NFIB Survey gives me a more up-to-the-minute sense of what is happening at a grassroots level among small business owners.