Beige Book: Capturing Small Business Insights

The Federal Reserve Bank is preparing to announce the first report in what many believe will be a challenging economic year. As businesses begin to leverage resources and talent for 2023 objectives, understanding how to navigate global economic uncertainty will be critical.

What is the Beige Book?

Eight times per year, each Federal Reserve bank gathers anecdotal information about the economy and publishes summaries of the information by District and sector in what is known as the Beige Book. The report offers perspective on a number of economic sectors, beginning with commentary on the overall economic activity for a particular District. Each state is a member of the Reserve Bank Districts mentioned and California is a member of the Twelfth District. Specific sectors covered in the report may include:

• Employment and Wages

• Consumer Spending

• Prices

• Trade and Commerce

• Energy

• Retail and Tourism

• Manufacturing

• Agriculture and Resource-Related Industries

• Real Estate and Construction

• Banking and Financial Institutions

• Non-financial Services, including Software, Technology, and Professional

• Worker Experience and Minority- and Women-owned Enterprises

Why is this useful for small businesses?

The reports the Federal Reserve Banks offer give businesses a view of the economic realities in various United States districts; this information is broken down into chunks that quickly bring business owners up to speed and enable better strategic decision-making. Small businesses, who are focused on delivering exceptional products, services, and navigating the uncertain waters of market growth, may not have sufficient resources to independently gather and digest many of the sector-specific findings discussed.

By glancing broader market conditions, businesses can act more effectively, and although the Beige Book is not intended to be predictive, it does help owners consider obstacles and identify variables that may grow operations, aid new market entries, or empower negotiations.

Focused Considerations:

Consider the following examples of sector-specific questions that may aid and empower your company's business intelligence:

• Market Access: How do the realities of your target market impact your ability to enter successfully and grow market share?

• Wages and Talent: Is there sufficient skilled labor to fulfill your business needs? Is the labor market currently competitive or dragging?

• Prices: Are the costs of your business inputs rising or falling? What variable costs are most likely to shift based on the realities of where you do business?

• Consumer Spending: Are people buying more or less of the products tied to your business sector? Can you forecast future demand?

• Finance: Are rates rising or falling and how does that impact the demand for loans?

• Real Estate: How is the sales activity and housing inventory in your District? Are you prepared to communicate market realities to clients?

Looking Ahead

The latest publication of the Federal Reserve's Beige Book is scheduled to release January 18th, 2023. While there are no business outcomes guaranteed by leveraging the materials discussed in the Beige Book or from any other sources of information, discovering the broad perspective offered by the Federal Reserve during each report's publication may help businesses strengthen their strategic decisions alongside day-to-day operations.

Disclaimer: Use of the Federal Reserve's"Beige Book" is at the sole discretion of the reader. While Southernmost Company has offered insight into potential benefits of gathering business intelligence from sources such as the Beige Book, Southernmost Company is not responsible for the Federal Reserve, the Beige Book, or for any actions a reader may take based on information from the Federal Reserve or the Beige Book.