Surfaces Education Advisory Council
CONFIDENCE: During the first quarter, FCNews reported from the numerous markets, conventions and conferences that dot the start of the year a growing level of confidence in the industry—from the mills down to the retailers; even some installers were expressing optimism. It seems like this brighter outlook is not confined to the flooring industry as the National Federation of Independent Businesses’ (NFIB) most recent Small Business Optimism Index was up for the third consecutive month with business owners indicating plans to increase capital spending, inventory investment and hiring. Small businesses—defined as those with fewer than 500 employees—showing confidence is important as they account for about half of all private-sector jobs and 65% of all new jobs, according to the U.S. Small Business Administration.
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DOWNSIDE: Despite confidence being up, NFIB chief economist Bill Dunkelberg noted the results also indicate financial results for small business have not improved as much as for big corporations. “While the Fortune 500 are enjoying record high earnings, Main Street earnings remain depressed,” he said. Robert Dietz, an economist and assistant vice president of the National Association of Home Builders (NAHB), said one way to help kick-start small business growth is through a strong housing market. “Home building is an industry dominated by small businesses,” he said. Moreover, when housing fares well, it spurs job and economic growth.
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SPENDING: As the economy slowly recovers, it has often been said the luxury market either never fully went into recession or it was the first out of the gate. Further proof that those with money want to spend it can be seen in the Spring 2013 Affluent Market Tracking Study. The 23rd edition of the twice yearly study reports the wealthiest 10% of U.S. households, which account for almost half of all consumer spending, plan to maintain spending despite expecting lower income due to higher taxes. The study tracks the wealthiest 11.4 million households based on net worth, which, according to the authors, has been demonstrated to be a more stable indicator of wealth than income.
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WEALTHY DEFINED: The survey is based on a projectable national sample of 463 respondents representative of U.S. households with a minimum $800,000 net worth. The respondents reported an average income of $309,000 per year and average net worth of $3.1 million. The average value of each primary residence is $1.2 million. The good news, over half of the affluent consumers say they do not plan to reduce or defer expenditures during the next 12 months. The 71-page/58-exhibit study is available for $495, or, for another $200, a 199-page set of 100 tables of cross tabulated data is available. To order a copy or for more information, contact Ron Kurtz at kurtzgroup@comcast.net.
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TOUGH NUT: Despite the woes of the U.S. economy, America is still the most desirable place to be when it comes to doing business. Unfortunately, for foreigners, it is also the toughest to crack—especially for our neighbors across the pond. A survey by Barclays Bank found while the U.S. is a top choice for growth, 46% of British retailers say it is “the hardest market in which to achieve commercial success.” Richard Lowe, head of retail and wholesale at Barclays, said, “On the surface the U.S. would appear to be an easy market in which to secure a foothold but its sheer scale means achieving commercial success across the whole country is an incredible feat.” Of course, the Internet has removed many barriers, and it is the preferred retail channel of 33% of retailers, rising to 52% among those who had already gone abroad. Just 6% of British retailers planned to open physical stores.