2011 saw a lot of ups and downs in the financial sector. There were many positive indicators that the economy was improving, but not enough for most small businesses to be more than cautiously optimistic. Some of these indicators sent some very mixed messages, and there are many variables that could change the outcome. These positive changes, though, are leading to some projections for the new fiscal year and impacting many trends in financial management solutions.
American retailers in 2011 had a record year. They saw their first $400 billion sales month in November and followed it up with a slight increase in December. All of the 2011 retail sales totaled $4.7 trillion, which is up 8% over last year and represents the largest percentage increase since 1999.
While these things seem to be pointing to a positive turn, it must also be noted that the December increase was the lowest in seven months. This sudden decrease in growth has caused some worries, but at the same time many people are speculating that it could simply be the result of decreased gas prices and heavy discounting throughout the holidays. However, the number of people applying for unemployment benefits also went up, which could be the result of holiday staff leaving their positions.
The recent positive trends were led by sales in the automotive industry which were up 1.5% over last year. This number was supported by a report that found the major metropolitan areas experiencing the greatest recovery were the ones that specialized in automotive products and related durable goods. This same report also suggested that the technology centers (metro areas focused on the information technology industries) are also showing better signs recovery, even though many electronics stores were experiencing a decline in sales.
The Federal Reserve issued a report saying that the last six weeks of 2011 were among the best of the year, but there still appears to be cause for concern. Small business financial management initiatives will need to watch the changing environment very closely. A recovery seems in the works, but it is moving slowly and still requires a careful approach for the coming year.
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