The 2012 Outlook for Hispanic/Latino businesses is based on responses to the Gazelle Index national survey. The Gazelle Index is the first ever quarterly survey of small-business owners that provides up-to-date, time sensitive business information and its results are broken down by firms whose owners are Hispanics/Latino, African American/black, non-minority/white, women and men. The survey includes 631 responses from randomly selected CEOs, who operate businesses with 10 to 100 employees. The results have a margin of error of + or -5%; 19.8% of the respondents operated firms owned by Hispanic/Latinos.
Hiring Plans: Hispanic/Latinos CEOs do not plan to increase hiring in 2012. In fact, they are the only group for whom the number of CEOs planning to add jobs in 2012 (20.0%) was not statistically different from the number of CEO who plan to cut jobs (17.6%). Note that any difference within a range of 5% (+ or -) is not statistically significant.
Regional Hiring: Regionally, 45.6% of Hispanic/Latino businesses are located in the South, 38.4% are located in the West, 5.6% in the Midwest and 10.4% in the Northeast. Hiring by Hispanic/Latino businesses will be strongest in the South, where 28.1% of businesses intend to add workers while only 8.8% will cut payrolls. Secondly, hiring will be strong in the Midwest; 42.9% will add workers while 14.3% will cut. However, only 5.6% of Hispanic/Latino businesses are located in the Midwest. Strong hiring in the South will be offset by very weak hiring in the West; 10.4% will add workers but 27.1% will cut back. Additionally, hiring will also be very weak in the Northeast; 7.7% will add workers while 23.1% will cut back.
Regional Pain of the Recession: Employment in Hispanic/Latino businesses was hit harder by the recession than employment in businesses among all other groups. In fact, 55.0% of Hispanic/Latino firms cut their workforce as a result of the recession and 25.8% cut employment by 50% or more. Firms in the Northeast were hardest hit by the recession; 61.6% of Hispanic/Latino businesses cut their work force and 30.8% did so by 50% or more. Second hardest hit region was the West, where 55.3% cut their workforce and 34% did so by 50% or more. In the South, 54.7% cut workers and18.9% did so by 50% or more. Finally, in the Midwest, 42.9% cut their workforce and 14.3% did so by more than 50%.
Industry Distribution: The main industries among Hispanic/Latino businesses included in the survey are as follows: Construction, 28.0%; Retail Trade, 15.2%; Professional and Technical Services, 10.4%; Manufacturing, 9.6%; Management and Administrative Services, 8.8%; and, Information Technology, 6.4%.
Future Industry Hiring: The industries where hiring will be the strongest are as follows: Retail Trades– 31.6% of businesses will hire while 10.5% will cut back; and Management and Administrative Services–36.4% of businesses will hire while 18.2% will cut back. In Construction, the largest industry for Hispanic/Latinos, 17.1% of business owners plan to increase hiring while 20.0% intend to decrease it. Also in construction, 62.9% of business owners do not anticipate changing their current level of employment.
Industries Most Optimistic about the Future: Hispanic/Latino CEOs are the least optimistic among all groups. However, industries where they expressed the greatest future optimism are wholesale trade and manufacturing. In all other industries, Hispanic/Latino business owners were more pessimistic than they were optimistic.
2012 Gazelle Index Economic Forecast
- Expect to see much more hiring and economic growth in 2012
- Expect GDP to grow between 3% and 3.5% during the first half of the year.
- Expect the overall unemployment rate to decrease to 7.5% by the third quarter of 2012.
- Expect Hispanic/Latino unemployment to decrease to 9.8% throughout 2012.
What is driving growth? 1. The US economy has not been derailed by Euro debt crisis; 2. Corporations are starting to invest and they and still have enormous cash balances; 3. Consumers are beginning to spend more freely; 4. Housing starts and building permits are increasing; and 5. New claims for unemployment compensation are way down.
Last modified: January 28, 2012