Archive | November, 2013

Small Business Saturday

30 Nov

angry-turkeyHistorically, the day after Thanksgiving (known as Black Friday) and, increasingly, Thanksgiving evening itself are a boon for big-box retailers with thousands of stores across the country. In recent years then, the Saturday after Thanksgiving has been a celebration of small business. So get out and support your local small business owners.

But let’s consider something more.

I try to keep this blog from being political, but I would be remiss if I did not make reference to the recent federal government shutdown. Living just across the Potomac River from the nation’s capital, I have seen first-hand the results of sequester and the shutdown. Not only are federal government employees and contractors impacted – the service industries that support this workforce as well as people who depend on federal government support are also affected. That’s a lot of people relying on one (dis)organization.

As I stated in a recent blog post – negative conditions tend to be drivers of new business opportunities. Consider the unintended consequences of the shutdown – we learned that we could survive (at least for a time) without an operating federal government. More importantly, when our soldiers and citizens needed support, small business and not-for-profits stepped forward to fill the void.

Starting a small business allows the individual (especially those considered socially or economically disadvantaged) to be a productive member of society and to provide for their own economic security. And in many cases, small businesses provide better services by being lean, agile and innovative.

So reduce the federal budget by making more services local and letting small businesses start and grow. I do not suggest that this will be quick or easy – it will require elected officials to focus more on value creation and less on their job security. It will require oversight (not more regulation). An excellent read on this subject is “The Rise of the Creative Class” by Richard Florida.

Happy Thanksgiving.

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Indicator 8 – Manufacturing and Trade

6 Nov

Manufacturing and Trade Inventories and Sales (MTIS) data represents the combined value of sales and shipments by manufacturers in a specific month; as well as the combined values of inventories in the wholesale and retail business sectors and manufacturing. The current and most recent past month’s inventory/sales ratios are also provided.

Information is provided across 17,000 manufacturing, retail and wholesale companies within 160 industries.

This data set is the primary source of information on the state of business inventories and business sales. Inventory rates often provide clues about the growth or contraction of the economy. A growth in business inventories may mean sales are slow and the economy’s rate of growth is also slowing. If sales are slowing, businesses may be forced to cut production of goods, and that can eventually translate into inventory reductions. Consider the chart below; and the relationship between the spike in inventories/sales ratio and the overall economy at the time.

On October 29, 2013, the U.S. Department of Commerce’s U.S. Census Bureau released the August 2013 Manufacturing and Trade Inventories and Sales report. The report showed:

Sales: the combined value of distributive trade sales and manufacturers’ shipments for August, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,297.8 billion, up 0.3 percent (±0.2) from July 2013, and were up 4.2 percent (±1.1) from August 2012.

Inventories: manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,668.0 billion, up 0.3 percent (±0.1) from July 2013 and up 3.1 percent (±1.5) from August 2012.

Inventories/Sales Ratio: the total business inventories/sales ratio based on seasonally adjusted data at the end of August was 1.29. The August 2012 ratio was 1.30.

MTIS 2004-2013