TRENDS Analysis
Updated September 26, 2022
Executive Summary
The most recent Oakworth Tailored Regional Economic & New Development Survey (TRENDS) suggests overall business strength remains at a reasonably high level, despite global turmoil and a summer swoon in the financial markets. This trend is generally in keeping with the other national surveys about the U.S. economy.
Participants in TRENDS said they were still having a difficult time finding qualified employees — an ongoing national problem, as the NFIB Small Business Job Openings Index remained at an elevated level (49). Currently, the government estimates there are about 10.70 million job openings in the United States..
Also, TRENDS responders reported continued higher prices, with this component remaining at an elevated level of 4.4. The most recent NFIB Small Business Higher Prices actually fell from 63 to 56. While both remain at elevated levels, it is interesting to note prices in our area appear to be somewhat higher than they are elsewhere.
Finally, TRENDS participants overwhelming said their “business has returned to pre-COVID operations.” The average response to this question in the survey was a 4.25 out of 5. Unfortunately, respondents were slightly more pessimistic than they were about future CapEx plants.
In aggregate, the Oakworth TRENDS Survey suggests the overall economic activity in our area continues to be in moderate expansion.
Below, we highlight the NFIB findings compared to the TRENDS Survey regional data set for perspective. The specific questions from the Oakworth TRENDS Survey follow.
Each questions in the TRENDS Survey is “scored” from 1 to 5. Each data point represents the average answer for each question for each survey.
Question 1: How would you rate your current level of business activity?
Business activity has remained consistently strong through mid-summer, but a bit lower than the peak we saw in late March. Consumer spending nationally remains strong, as it appears to be holding up in our markets as well.
1. Much weaker than expected 2. Somewhat weaker than expected 3. As expected 4. Somewhat stronger than expected 5. Much stronger than expected
Question 2: How would you rate your ability to attract/find qualified employees?
It is clear that finding qualified employees is just as difficult in our markets as it is nationally. As the additional federal unemployment benefits expired, some thought this difficulty would begin to ease. Both the TRENDS Survey and the national data show that is not the case.
1. Very easy 2. Somewhat easy 3. About normal 4. Somewhat difficult 5. Very difficult
Question 3: Do you plan to expand your operation over the next 6 months?
While still positive, business owners in our markets are a bit less willing to expand their operations than they were in the spring. Most likely a combination of 1) concern over the cloudy national economic outlook and 2) the just mentioned continued difficulty in finding qualified employees.
1. Strongly disagree 2. Somewhat disagree 3. Too early to tell 4. Somewhat agree 5. Strongly agree
Question 4: How would you rate the growth of your input and expenses?
This response remains stubbornly high, and in line with the national inflation numbers we are seeing. Just about everything is significantly more expensive than last year. On an optimistic note, we have started to see commodity prices fall over the past few months.
1 Decreasing much more rapidly than expected 2. Decreasing somewhat more rapidly than expected 3. As expected 4. Rising somewhat more rapidly than expected 5. Rising much more rapidly than expected
Question 5: Rate the following statement: “My business has returned to pre-COVID operations.”
For the most part, business owners in our markets have seen a recovery to their pre-COVID operations. That being said, the latest reading for the question is the lowest number we have seen since early spring of this year. Hopefully this will not be a new trend…
1. Strongly disagree 2. Somewhat disagree 3. Too early to tell 4. Somewhat agree 5. Strongly agree
