Small food and beverage businesses in the US report confidence in their performance over the next year, forecasting higher revenues and more hiring during the period, according to survey released last week.
Conducted by the Small Business Research Board (SBRB), the survey reveals that this level of confidence is not shared by small businesses in other segments, suggesting strong demand dynamics in the food industry.
"It is interesting how owners and managers of small businesses operating in differing industries can view the same economy so differently," said Gregg Steinberg, president of International Profit Associates, which co-sponsored the report.
"Food and beverage companies don't appear to have the same concerns about the economy that are impacting the confidence of the construction and contracting firms as well as small manufacturers. It suggests a demand driven message, that while construction is down and manufacturing may be weakened, food and beverage consumption is not going to weaken."
SBRB, which conducts polls on a quarterly basis, used three key indicators to determine the confidence of small companies: outlook for the general economy, revenue growth, and hiring expectations.
According to its survey of over 800 companies, the food and beverage industry's Small Business Confidence Index (SBCI) increased more than eight points to 48.5 during the third quarter. This is higher than the overall SBCI of 43 reported for all US small businesses.
The survey found that 59 percent of small food and beverage companies project revenue increases for the next 12 months, which contributed significantly to overall confidence levels. Some 36 percent said they expected revenues to remain the same in the coming year, while five percent predicted a decrease of less than five percent.
Additionally, 43 percent of small business owners said they forecast a "better" outlook for the general economy during the period, while 23 percent forecast this to be "worse". Some 34 percent said there would be "no change".
The majority of small food and beverage manufacturers also said they expected to increase their workforce over the coming year, with 43 percent predicting they would hire new employees in the period. Just over a third (36 percent) said they would retain the same employee number, while 15 percent said they would decrease hiring.
According to SBRB, its quarterly polls are designed to benefit small businesses, while also providing opportunities for third parties to gain insight into the attitudes of small businesses nationwide.
The surveys gather opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations. Participation in the study, which includes small businesses from around the country, is on a voluntary basis.