Gazelle Index: Q1 2012 Outlook

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According to the 4th Quarter Gazelle Index small business owners are now more positive than they are negative about current and future business conditions and will increase hiring over the next three months. Although business activity has not fully recovered from the recession, owners’ confidence is increasing and they will increase future hiring. The Gazelle Index registered .51 based on a November survey of small business owners. Values higher than .50 suggest that owners are more positive than negative. The component of the index that measures current employment and business conditions was .43, which indicates that existing activity is still not good. However, the measure of future hiring and future optimism was .58. The survey results revealed that the most hiring will occur among businesses operating in information technology and communication industries. CEOs also plan to grow jobs in healthcare and social services, specialty trades construction, and in professional business services. The industries that are likely to add the smallest number of new jobs are non-durable manufacturing, restaurant and retail.

Geographically about 30% of firms located in the Northeast, Midwest and South will increase hiring over the next three months. In the West, hiring plans are much lower, as only 18% of businesses will add new jobs. The survey also showed that black CEOs will increase hiring the most. That is, 37% will increase employment. At the same time, 24% of firms owned by whites indicated they will add new jobs while 20% of firms owned by Hispanics will do the same. Hiring plans among firms owned by men were not significantly different than were those among firms owned by women, 29% and 26% respectively. CEOs of all groups, except Hispanics, plan to add more than twice as many jobs than they plan to cut. Among Hispanics, 20% of CEOs will add jobs, but 18% will reduce employment.

The Gazelle Index is a new national survey of small businesses with 10 to 100 employees that are owned by minorities, women and non-minorities. The quarterly Index measures their current job and business activity and their future confidence and hiring plans. The survey results were based on a national random sample of 631 CEOs and it has a margin of error is 5%. It was conducted during the first three weeks of November, 2011.

Last modified: December 2, 2011

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