While consumer confidence, sentiment and demand were relatively unchanged in March, data clearly shows small business owners remain skeptical amid growing geopolitical tensions, rising national debt, high interest rates and stubborn inflation.

The Conference Board Consumer Confidence Index® decreased from 106.7 (1985=100) in February to 104.7 (1985=100) in March. Similarly, the University of Michigan Survey of Consumers – a survey consisting of approximately 50 core questions covering consumers’ assessments of their personal financial situation, buying attitudes and overall economic conditions – finished at 79.4 in March, with a preliminary reading of 77.9 in April.

“Sentiment moved sideways for the fourth straight month, as consumers perceived few meaningful developments in the economy,” says Joanne Hsu, director of Survey of Consumers.

Though expectations over personal finances, business conditions and labor markets remain stable, inflation expectations are on the rise and could negatively impact consumer spending.

According to Fiserv, Inc. (NYSE: FI) – a leading global provider of payments and financial services technology – the latest Fiserv Small Business Index™ registered 141 – a modest one-point decline from February, which is largely attributable to small business closures on Easter Sunday.

On a national level, spending at small businesses was -0.8% month-over-month but up 2% year-over-year. Overall, national retail sales across small businesses were “soft” compared to February (-1.6% MoM), though trending well ahead of last March (+5.1% YoY). Within Food Services and Drinking Places (Restaurants) (NAICS 722), spring breakers drove the month-over-month increase.

Caption: Advance estimates of U.S. retail and food services sales for March 2024 – adjusted for seasonal variation and holiday and trading-day differences but not for price changes – were $709.6 billion, up 0.7% (±0.5%) from the previous month and up 4% (±0.5%) year-over-year. Total sales for the January 2024 through March 2024 period were up 2.1% (±0.5%) year-over-year.

Small business owners continue to face strong headwinds, from high prices to poor labor quality. In March, the NFIB Small Business Optimism Index decreased to 88.5 – the lowest level since December 2012 and the 27^th consecutive month below the 50-year average of 98.

Twenty-five percent of small business owners pointed to inflation as the single most important challenge in operating their business. Overall, 56% reported hiring or trying to hire in March, with 48% of owners (86% of those hiring or trying to hire) noting few or no qualified applicants for the positions they were trying to fill. Thirty-one percent of business owners have openings for skilled workers and 14% have openings for unskilled labor. According to respondants, difficulty in filling open positions is particularly acute in the construction, transportation and service sectors.

Professionals in the automotive, RV and powersports industries remain steadfast in their efforts to evolve their business models and grow their brands in the face of adversity. As such, the monthly Key Performance Indicator Report serves as an objective wellness check on the overall health of our nation, from the state of manufacturing and vehicle sales to current economic conditions and consumer trends. Below are a few key data points explained in further detail throughout the report.

Top Takeaways:

Economic activity in the manufacturing sector expanded in March after contracting for 16 consecutive months, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®. The Manufacturing PMI® registered 50.3% in March, up 2.5 percentage points from the 47.8% recorded in February.
In March, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4% on a seasonally-adjusted basis, says the U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index increased 3.5% before seasonal adjustment.
Total new-vehicle sales for March 2024, including retail and non-retail transactions, are projected to reach 1,525,700 units – a 12.1% year-over-year increase, according to a joint forecast from J.D. Power and GlobalData.
RV wholesale shipments are expected to hit between 334,700-365,500 units in 2024, according to the Spring 2024 issue of RV RoadSigns – a quarterly forecast prepared by ITR Economics for the RV Industry Association. Most recently, RVIA reported 31,024 total RV shipments in February 2024, a 17.8% year-over-year increase.
Powersports Business says dealers across the country reported an overall combined revenue decline of 6.2% in February, according to composite data from more than 1,700 dealerships in the U.S. that utilize CDK Lightspeed DMS. On average, dealerships were up a nominal 2.9% in service but down 5.9% in major units and 19.1% in parts.

KPI – April 2024: The Brief

By Pat Curtin