Small biz optimism surges

According to American Trucker Jan 10, 2017

Small business optimism rocketed to its highest level since 2004, with a stratospheric 38-point jump in the number of owners who expect better business conditions, according to the monthly National Federation of Independent Business (NFIB) Index of Small Business Optimism.

“We haven’t seen numbers like this in a long time,” said NFIB President and CEO Juanita Duggan. “Small business is ready for a breakout, and that can only mean very good things for the U.S. economy.”

The Index reached 105.8, an increase of 7.4 points. Leading the charge was “Expect Better Business Conditions,” which shot up from a net 12 percent in November to a net 50 percent last month.

“Business owners who expect better business conditions accounted for 48 percent of the overall increase,” said NFIB Chief Economist Bill Dunkelberg. “The December results confirm the sharp increase that we reported immediately after the election.”

The other two big movers in the survey, “Sales Expectations” and “Good Time to Expand,” jumped by 20 percentage points and 12 percentage points, respectively.

“This is the second consecutive month in which small business owners reported a much brighter outlook for the economy and higher expectations for their businesses,” said Dunkelberg. “In this month’s report, we are also finding evidence that higher optimism is leading to increased business activity, such as capital investment.”

Sixty-three percent of respondents made capital outlays, an eight-point increase over November. Also, the net percent of owners reporting inventory gains increased six points.

“Business owners are feeling better about taking risks and making investments,” said Duggan. “Optimism is the main ingredient for economic expansion. We’ll be watching this trend carefully over the next few months.”

Despite sharply higher optimism, hiring activity remained flat in December. Job creation increased by 0.01 workers per firm and job openings dropped two points. According to the NFIB Jobs report, released last week, finding qualified workers remains a persistent problem for small business owners.

“The labor market is getting tighter,” said Dunkelberg. “That’s good news for workers because they can command higher compensation, but many small business owners aren’t yet confident enough to raise prices to offset the higher labor costs. Owners are still in a pinch, but the overall picture for December was very positive.”

In addition to the optimism with small business owners, the Spot Market rates for truck load carriers is up.

Spot market load availability gained 4.8% during the week ending Nov. 5 while the number of trucks posted slipped 2.0%, according to DAT Solutions, which operates the DAT network of load boards.

At $1.70/mile, the average van rate was up 5 cents week over week and was just 1 cent below year-ago levels. For reefers, rates looked more like the June produce peak than the first week in November, jumping 7 cents from the previous week to an average of $1.97/mile. Reefer rates haven't been this high since mid-July.

Van and reefer load-to-truck ratios jumped as well:

·         Van L/T ratio: 3.0. Up 9%

·         Reefer L/T ratio: 6.8. Up 13%

·         Flatbed L/T ratio: 14.1. Down 2%

VAN TRENDS

Van load posts rose 7% and truck posts dropped 2% last week. Price changes were small on most individual lanes but the overall effect boosted the average linehaul rate to just 1 cent below the average for this time last year.

Several van markets are much stronger than they were a month ago, especially markets in the West (Los Angeles, Dallas, Denver, Seattle, and Stockton) that connect the region to much of the East Coast. 

The top van markets by region all showed gains:

·         Northeast: Buffalo, $1.97/mile, up 6 cents

·         West: Los Angeles, $2.07/mile, up 4 cents

·         South Central: Dallas, $1.51/mile, up 1 cent

·         Midwest: Chicago, $2.05/mile, up 1 cent

·         Southeast: Charlotte, N.C., $1.91/mile, up 2 cents

REEFER TRENDS

With produce and other fresh food moving into position for Thanksgiving, reefer load posts unexpectedly increased 10% last week while truck posts declined 2.5%.

Rates on the top reefer lanes have been hard to predict, with lots of changes from week to week:

·         Fresno-Denver added 27 cents for an average of $2.27/mile

·         Miami-Northern New Jersey added 35 cents for $1.44/mile

·         Green Bay-Minneapolis rose 36 cents to $2.24/mile

·         Miami-Baltimore was down 29 cents to $1.36/mile

·         Los Angeles-Denver dipped 18 cents to $2.38/mile

·         Ontario-Phoenix rose 7 cents to $3.10/mile

FLATBED TRENDS

Flatbed load posts declined 1% last week as truck posts increased less than 1%. That caused the load-to-truck ratio to decline nearly 2% to 14.1 loads per truck. The average flatbed rate decline 1 cent to $1.91/mile.

FUEL HOLDS: The national average price of diesel fell a penny to $2.47/mile compared to the previous week.

Rates are derived from DAT RateView, which provides real-time reports on prevailing spot market and contract rates, as well as historical rate and capacity trends. All reported rates include fuel surcharges.

Get the latest rate trends at DAT.com