Title Law Associates
For those subscribers interested in current developments within the title insurance industry and significant claims litigation case law citations, we suggest you click here for access to the Title Law Associates website and their publication Title Management Today.
Insurance Journal
The Property & Casualty News Source Insurance News Online and in Print
Market Analysis
Quarterly Indicators: The Economy and Small Business
First Quarter 2004
by The Small Business Administration, Office of Advocacy
Quarterly Indicators: The Economy and Small Business
First Quarter 2004
Trends
Real economic output has been Rising, especially since third quarter 2003. Production increased in manufacturing, an industry hard hit during and after the recession. Real gross private investment is also improving, a sign that capital spending is recovering.
The economy is experiencing positive employment signs, including the creation of nearly 600,000 new nonfarm jobs in the first three months of 2004. Nearly all sectors saw positive gains from November 2003 to March 2004. Unemployment remains an issue, however as nonfarm payrolls have not recovered to their pre-recession levels, and 3.3 million people remain unemployed. The employment picture is cited for waning consumer sentiment and business optimism (NFIB survey) in February and March, yet both are higher than their 2002 and 2003 averages.
Productivity has increased rapidly, with nonfarm business output per hour up 5.3 percent between first quarter 2003 and 2004.
Costs to provide benefits to employees continue to increase. Wages and salaries increased 2.6 percent between first quarters 2003 and 2004, while benefit costs rose 7.1 percent. Prices, however remained stable.
Interest rates remain at all-time lows, less than half of their value in 2000. The Federal Reserve Board's Senior Loan Officer Opinion Survey indicates more banks this year than last plan to ease small firm lending standards in the next three months, and small firm demand for lending is rising.
Venture capital has remained relatively stable over the past year, although venture investments are significantly lower than their highs during the technology boom of the late 1990s.
Proprietors' income, up nearly 10 percent between the first quarters of 2003 and 2004, continues to increase. Corporate profits increased 31.4 percent from fourth quarter 2002 to fourth quarter 2003. (First quarter data are not yet available.)
The number of incorporated self-employed was at 5.2 million in March 2004, up from an average of 4.4 million for the years of 1999, 2000, and 2001.
More small firm owners are saying it's a good time to expand their business than in previous years, although the February and March 2004 levels for this sentiment were lower than in the previous few months. Job-related concerns are cited for these dips.
Small Business Indicators
Last Five Years
Last Five Quarters
1999
2000
2001
2002
2003
Q1-03
Q2-03
Q3-03
Q4-03
Q1-04
Business Bankruptcy Filings (Thousands)
37.6
35.5
40.1
38.5
35.0
8.8
9.3
8.4
8.3
--
Proprietors' Income (Billions of Dollars)
678.3
728.4
770.7
797.7
846.9
813.5
838.8
860.9
874.3
894.3
Prime bank Loan Rate
8.0
9.2
6.9
4.7
4.1
4.0
4.0
4.0
4.0
4.0
Rates for Smallest Loans (Less than $100,000)
8.7
9.7
7.4
5.1
4.4
4.3
4.8
4.2
4.3
--
Senior Loan Officers (% of Respondents):
Small Firm C&I Lending Standards have Eased
1.9
0.5
0.0
0.9
0.0
0.0
1.8
1.8
8.8
12.7
Small Firm C&I Lending Standards have Stayed the same
90.5
78.7
60.5
78.2
86.2
86.2
83.6
93.0
84.2
85.5
Small Firm Demand for C&I Loans is Stronger
14.5
15.5
6.6
4.6
12.7
13.8
5.5
15.8
15.7
27.3
Small firm Demand for C&I Loans has Stayed the same
75.4
65.8
50.4
50.0
60.0
51.7
67.3
56.1
64.7
67.3
Venture Investment: Number of Deals
5604
8068
4609
3033
2779
662
706
686
725
618
Venture Investment: Total Invested (Billions of Dollars)
54.4
105.9
40.7
21.3
18.4
4.2
4.7
4.3
5.2
4.6
Notes: All annual figures represent mean, except bankruptcies. The shaded area indicates a recession.
Sources: Administrative Office of the U.S. Courts; Board of Governors of the Federal Reserve System; National Venture Capital Association; U.S. Bureau of Economic Analysis
Last Five Years
Last Five Months
1999
2000
2001
2002
2003
Nov-03
Dec-03
Jan-04
Feb-04
Mar-04
NFIB Small Business Optimism Index (1986=100)
101.2
100.3
98.4
101.2
101.3
105.3
106.9
105.8
102.6
102.6
NFIB: next 3 months "good time to expand" (% of respondents)
22.8
19.2
12.3
14.3
15.7
24
24
25
19
18
Self-employed, Unincorporated (Millions)
10.5
10.3
10.2
10
10.7
11.1
10.7
10.8
10.5
10.2
Self-employed, Incorporated (Millions)
4.4
4.4
4.4
4.6
5.0
5.1
5.0
5.1
5.1
5.2
Notes: All annual figures represent mean. The shaded area indicates a recession.
Sources: National Federation of Independent Business; Current Population Survey, U.S. Bureau of Labor Statistics
Employment by Major Sector (millions)
Percent Small Business
Last Five Years
Last Five Months
1999
2000
2001
2002
2003
Nov-03
Dec-03
Jan-04
Feb-04
Mar-04
Goods-Producing Industries
54.1
24.47
24.65
23.88
22.56
21.82
21.69
21.67
21.70
21.68
21.77
Natural Resources and Mining
50.6
0.60
0.60
0.61
0.58
0.57
0.57
0.57
0.57
0.57
0.58
Construction
85.1
6.54
6.79
6.83
6.72
6.72
6.77
6.77
6.81
6.79
6.86
Manufacturing
41.6
17.32
17.27
16.44
15.26
14.52
14.34
14.32
14.31
14.32
14.33
Service-Producing Industries
49.2
104.53
107.14
107.96
107.79
108.12
108.34
108.37
108.50
108.59
108.85
Trade, Transportation and Utilities
47.1
25.77
26.22
25.99
25.50
25.28
25.26
25.21
25.31
25.33
25.41
Wholesale Trade
62.9
5.89
5.9.
5.77
5.65
5.61
5.59
5.60
5.61
5.61
5.62
Retail Trade
43.4
14.97
15.28
15.24
15.02
14.92
14.92
14.88
14.94
14.96
15.01
Information
26.5
3.42
3.63
3.63
3.39
3.20
3.17
3.18
3.16
3.17
3.17
Financial Activities
40.2
7.65
7.69
7.81
7.85
7.97
7.99
7.98
7.98
7.99
8.00
Professional and Business Services
44.2
15.95
16.67
16.48
15.98
15.99
16.11
16.16
16.17
16.20
16.25
Education and Health Services
47.5
14.79
15.11
15.65
16.20
16.58
16.71
16.73
16.75
16.76
16.81
Leisure and Hospitality
61.2
11.54
11.86
12.03
11.99
12.13
12.18
12.19
12.22
12.23
12.26
Other Services
85.5
5.09
5.17
5.26
5.37
5.39
5.38
5.37
5.38
5.38
5.39
Government
0
20.31
20.79
21.12
21.51
21.57
21.54
21.54
21.53
21.54
21.57
Note: Seasonally adjusted. All annual figures represent mean. Shaded area represents a recession. See http://www.bls.gov/ces/cessuper.htm for NAICS code equivalents for each sector.
Sources: Office of Advocacy, using data from the U. S. Bureau of the Census; U.S. Bureau of Labor Statistics
Macroeconomic Indicators
Last Five Years
Last Five Quarters
1999
2000
2001
2002
2003
Q1-03
Q2-03
Q3-03
Q4-03
Q1-04
Annual Change, Real GDP
4.5
3.7
0.5
2.2
3.1
2.0
3.1
8.2
4.1
4.2 (p)
Real Personal Consumption Expenditures (Billions of Dollars)*
6438.6
6739.4
6904.6
7140.5
7365.2
7244.1
7304.0
7426.6
7486.2
7555.6
Real Gross Private Fixed Investment (Billions of Dollars)
1642.6
1735.5
1590.6
1572.0
1638.1
1581.6
1599.9
1656.1
1714.6
1744.7
Federal Government Surplus or Deficit (Billions of Dollars)
103.6
189.5
50.5
-240.0
-414.5
-320.6
-424.6
-494.8
-418.9
--
Real Exports of Goods and Services (Billions of Dollars)*
1008.2
1096.3
1039.0
1014.2
1034.7
1012.4
1009.6
1033.7
1083.1
1091.6
Real Imports of Goods and Services (Billions of Dollars)*
1304.4
1475.8
1437.1
1484.8
1543.9
1502.5
1535.7
1538.9
1598.3
1606.2
Corporate Profits after Tax (Billions of Dollars)
592.7
552.8
569.3
709.2
845.0
713.2
811.3
893.7
961.9
--
Nonfarm Business Sector Output per Hour for all Persons (1992=100)
112.2
115.3
117.8
123.6
129.1
126.0
127.9
130.8
131.6
132.7
Employment Cost Index: Private Sector Wages and Salaries (1989=100)
*Chained 2000 Dollars
Notes: Seasonally adjusted. All annual figures represent mean. Shaded area represents a recession.
Sources: U.S. Bureau of Economic Analysis; U.S. Bureau of Labor Statistics
Last Five Years
Last Five Months
1999
2000
2001
2002
2003
Nov-03
Dec-03
Jan-04
Feb-04
Mar-04
Unemployment Rate (Seasonally Adjusted)
4.2
4.0
4.8
5.8
6.0
5.9
5.7
5.6
5.6
5.7
Civilian Employment- 16 years and Older (millions, Seasonally Adjusted)
133.5
136.9
136.9
136.5
137.7
138.1
138.5
138.6
138.3
138.3
Civilian Unemployed- 15 Weeks and Over (Millions, Seasonally Adjusted)
1.5
1.3
1.8
2.9
3.4
3.5
3.4
3.4
3.3
3.3
Nonfarm Payrolls (Millions, Seasonally Adjusted)
129.0
131.8
131.8
130.3
129.9
130.0
130.0
130.2
130.2
130.6
Producer Price Index (Seasonally Adjusted, 1982=100)
125.5
132.7
134.2
131.1
138.1
138.9
139.5
141.0
141.8
142.7
Consumer Price Index (Seasonally Adjusted, 1982=100)
166.6
172.2
177.0
179.9
184.0
184.6
184.9
185.8
186.3
187.2
Consumer Sentiment Survey (1966=100)
105.8
107.6
89.2
89.6
87.6
93.7
92.6
103.8
94.4
95.8
ISM Purchasing Managers Index- Manufacturing Composite (Seasonally Adjusted)
54.6
51.7
43.9
52.4
53.3
61.3
63.4
63.6
61.4
62.5
Industrial Production (1997=100, Seasonally Adjusted)
110.6
115.4
111.5
110.9
111.1
112.9
113.1
113.9
114.8
114.5
M2 Money Stock (Billions of dollars, Seasonally Adjusted)
4526.0
4801.9
5222.9
5621.6
6016.9
6076.2
6071.0
6076.3
6129.2
6174.0
3-Month Treasury Bills (Secondary Market Rate)
4.64
5.82
3.39
1.60
1.01
0.93
0.90
0.88
0.93
0.94
10-Year Treasury Note (Constant Maturity Rate)
5.64
6.03
5.02
4.61
4.02
4.30
4.27
4.15
4.08
3.83
Notes: All annual figures represent the mean. The shaded area indicates a recession.
Sources: Board of Governors of the Federal reserve System; Institute for Supply Management; U.S. Bureau of Labor Statistics; University of Michigan's Survey of Consumers
Source: The Small Business Administration, Office of Advocacy, the voice for small business in the federal government and the source for small business statistics.
