Small Business Survey: First Quarter 2013

  • Highlights

    Business Conditions

    Results from the first-quarter 2013 survey indicate that respondents' forecast for business conditions over the next 12 months is mixed. The sales outlook, after significantly declining from the first quarter of 2012 to the third quarter of 2013, improved modestly, strengthened by firms more than 5 years old. The outlook for hiring remained essentially unchanged from third-quarter 2012, and was significantly below estimates from first-quarter 2012. On net, 27 percent of firms anticipate growing their workforce. Firms that have improved their outlook the most are in construction and real estate. Over the past year and a half, this industry has risen from the least likely to anticipate hiring to the most likely to anticipate hiring. The index for future spending on capital expenditures experienced an uptick from the third-quarter 2012 survey, but the difference was not significant.

    Financing Conditions

    About one-quarter of firms applied for financing in the first quarter of 2013. Of those that did not apply, most said they didn't need it but many others were discouraged from applying, fearing they would be turned down or offered bad credit terms. Banks remain the most common credit channel, and community banks were slightly more popular than large national banks. Credit fulfillment at banks, especially large national banks, continued to improve in the first quarter of 2013. Those applying for credit at large national banks in the first quarter of 2013 were significantly more successful than when they attempted to borrow from large national banks in the first and third quarters of 2012.

    Definitions

    Young versus mature firms: The results in this report are often presented according to "young" and "mature" firms. We distinguish young from mature by the age of the business; we consider firms less than six years old to be young.

    Small business: We define a "small" business as a firm with fewer than 500 employees.

  • Business Conditions

    Business
    Expectations
    Sales & Hiring
    Expectations
    Forecast
    Accuracy
    Uncertainty

    Results from the first-quarter 2013 survey indicate that the forecasts of respondents for business conditions over the next 12 months are mixed. After significantly declining from the first quarter of 2012 to the third quarter of 2013, their outlook for sales improved modestly, strengthened by firms more than 5 years old. Despite the increase from the third quarter, the index is below first-quarter readings and is not significantly different from the readings in either the third quarter or first quarter of 2012. The outlook for hiring is essentially unchanged from the third-quarter 2012 survey, and remains significantly below expectations indicated in the first-quarter 2012 survey. Among the 230 firms that participated in both this survey and the last, there is essentially no change in the groups' outlook across any of the three dimensions.

  • Financing Conditions

    Credit
    Demand
    Financing
    Satisfaction
    Reason for
    Applying
    Sources of
    Credit

    About one-quarter of firms applied for financing in the first quarter of 2013. Of those not applying, most said they didn’t need it but many were also discouraged from applying, fearing they would be turned down or offered bad credit terms. As in past surveys, firms borrowed mostly to support their cash flow needs. Applying to expand the business was also a frequent response. Among the 230 firms that participated in both surveys, a smaller portion of those participating in the current survey applied for financing and a greater portion reported not needing credit. About 11 percent of firms were discouraged from applying in both surveys.

  • Methodology

    Sample
    Characteristics
    Weighting

    The Federal Reserve Bank of Atlanta conducts a semiannual survey of small business contacts in the Southeast to get their perspective on general business and financing conditions. The Atlanta Fed conducted the first-quarter 2013 survey during the first three weeks of April. The survey was completed by 478 respondents. The questionnaire for this survey, which varies slightly each time, is available on the Atlanta Fed website.

    Seventy-one percent of respondents had fewer than 10 employees and 61 percent had revenues of less than $1 million. The median firm age is 13 years old.

  • Facilitators

    The following organizations helped disseminate the first-quarter 2013 survey:

    Alabama

    • Alabama District Office, U.S. Small Business Administration
    • Decatur-Morgan County Chamber of Commerce
    • Mobile Area Chamber of Commerce
    • Montgomery Area Chamber of Commerce
    • Shoals Economic Development Authority
    • Southern Minority Business District Council

    Florida

    • Black Business Investment Fund of Central Florida
      Capital Banking Solutions
      City of Tampa, Tampa City Council, District 7
      Florida Coalition for Micro Enterprise Development
      Florida Department of Economic Opportunity
      Florida First Capital Finance Corporation
      GDKN Corporation
      Greater Miami Chamber of Commerce
      Gulf Coast Business Finance
      Manatee Community Federal Credit Union
      Miami Dade SCORE
      Rural Development, U.S. Department of Agriculture
      Southern Florida Minority Supplier Development Council
      Space Coast Economic Development Commission
      SunBiz Showcase Alliance
      Sun Coast Community Capital
      University of North Florida Small Business Development Corporation
      Upper Tampa Bay Chamber of Commerce

    Georgia

    • Carroll County Chamber of Commerce
    • Edge Connection, Kennesaw State University
    • Fayette Chamber of Commerce

    Louisiana

    • Baton Rouge Area Chamber of Commerce
    • Louisiana District Office, U.S. Small Business Administration
    • New Orleans Business Alliance
    • Southwest Louisiana Economic Development Alliance
    • The Olinger Group

    Mississippi

    • Mississippi District Office, U.S. Small Business Administration
    • Southern Rural Development Center

    Tennessee

    • Entrepreneur Center, Chattanooga
    • Johnson City/Jonesborough/Washington County Chamber of Commerce
    • Kingsport Area Chamber of Commerce
    • Knoxville Chamber