NFIB Small Business Optimism Index for June 2023

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index for June 2023:

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Predicted: 90.0
Actual: 91.0

• Change from Previous Month: +1.79% (+1.6 points.)

• Change from 12 Months Previous: +1.68% (+1.5 points.)

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CHART: NFIB Small Business Optimism Index
June 2023 Update 

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From Today's Report:

"...'Halfway through the year, small business owners remain very pessimistic about future business conditions and their sales prospects, said NFIB Chief Economist Bill Dunkelberg. 'Inflation and labor shortages continue to be great challenges for small businesses. Owners are still raising selling prices at an inflationary level to try to pass on higher inventory, labor, and energy costs.'...'

Key Findings Include:

    -- Forty-two percent of owners reported job openings that were hard to fill, down two points from May but remaining historically very high.

    -- Small business owners expecting better business conditions over the next six months improved 10 points from May to a net negative 40%, 21 percentage points better than last June’s reading of a net negative 61%.

    -- The net percent of owners who expect real sales to be higher improved seven points from May to a net negative 14%..."

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• The baseline "100" score is associated with 1986 survey data.
  

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The previous month's Small Business Optimism Index was 89.4.

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• Click here to view the full NFIB report

 
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NFIB Small Business Optimism Index for April 2022

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index for April 2022:

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Predicted: 94.0
Actual: 93.2

• Change from Previous Month: UNCHANGED

• Change from 12 Months Previous: -6.613% (-6.6 points.)

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CHART: NFIB Small Business Optimism Index
April 2022 Update 

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CHART: NFIB Small Business Earnings
Last 3 Months
April 2022 Update

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From Today's Report:

"...The NFIB Small Business Optimism Index was unchanged in April, remaining at 93.2 and the fourth consecutive month below the 48-year average of 98. Small business owners expecting better business conditions over the next six months decreased one point to a net negative 50%, the lowest level recorded in the 48-year-old survey.

Inflation continues to be a problem for small businesses with 32% of small business owners reporting it’s their single most important problem in operating their business, the highest reading since the fourth quarter of 1980.

'Small business owners are struggling to deal with inflation pressures,' said NFIB Chief Economist Bill Dunkelberg. 'The labor supply is not responding strongly to small businesses’ high wage offers and the impact of inflation has significantly disrupted business operations.'


Key Findings Include:

    -- Forty-seven percent of owners reported job openings that could not be filled, unchanged from March.

    -- The net percent of owners raising average selling prices decreased two points to a net 70% (seasonally adjusted), two points below last month’s highest reading.

    -- The net percent of owners who expect real sales to be higher increased six points from March to a net negative 12%.

As reported in NFIB’s monthly jobs report, small businesses continue to struggle to find workers to fill open positions with 47% (seasonally adjusted) of all owners reported job openings they could not fill in the current period. Of those hiring or trying to hire, 93% of owners reported few or no qualified applicants for the positions they were trying to fill..."

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• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.
  

=========

The previous month's Small Business Optimism Index was 93.2.

=========

• Click here to view the full NFIB report

 
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NFIB Small Business Optimism Index for February 2022

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index for February 2022:

=========

Predicted: 97.0
Actual: 95.7

• Change from Previous Month: -1.442% (-1.4 points.)

• Change from 12 Months Previous: -0.104% (-0.1 point.)

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 CHART: NFIB Small Business Optimism Index
February 2022 Update

 

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 CHART: NFIB Small Business Earnings
Last 3 Months

February 2022 Update

 

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From Today's Report:

"...The In February, the NFIB Optimism Index decreased by 1.4 points to 95.7, the second consecutive month below the 48-year average of 98. Twenty-six percent of owners reported that inflation was their single most important problem in operating their business, a four-point increase since December and the highest reading since the third quarter of 1981.

'Inflation continues to be a problem on Main Street, leading more owners to raise selling prices again in February,' said NFIB Chief Economist Bill Dunkelberg. 'Supply chain disruptions and labor shortages also remain problems, leading to lower earnings and sales for many.'

Price raising activity over the past 12 months has continued to escalate, reaching levels not seen since the early 1980s when prices were rising at double-digit rates. Unadjusted, 4% of owners reported lower average selling prices and 68% reported higher average prices. Price hikes were the most frequent in retail (79% higher, 4% lower), wholesale (77% higher, 4% lower), construction (73% higher, 3% lower), and manufacturing (72% higher, 6% lower). Seasonally adjusted, a net 46% of owners plan price hikes.

As reported last week in NFIB’s monthly jobs report, 48% of all owners reported job openings they could not fill in the current period. Ninety-three percent of owners hiring or trying to hire reported few or no qualified applicants for their open positions.

Key Findings Include:

-- The net percent of owners raising average selling prices increased seven points to a net 68% (seasonally adjusted), a 48-year record high reading.

-- Owners expecting better business conditions over the next six months decreased two points to a net negative 35%.

-- Forty-eight percent of owners reported job openings that could not be filled, an increase of one point from January.

-- Inventory accumulation plans fell one percentage point, following a five-point decline in January, following the massive inventory build in Q4..."

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• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.
  

=========

The previous month's Small Business Optimism Index was 97.1.

=========

• Click here to view the full NFIB report

 
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NFIB Small Business Optimism Index for January 2022

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index for January 2022:

=========

Predicted: 97.0
Actual: 97.1

• Change from Previous Month: -1.82% (-1.8 points.)

• Change from 12 Months Previous: +2.211% (+2.1 points.)

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CHART: NFIB Small Business Optimism Index
January 2022 Update

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From Today's Report:

"...'More small business owners started the New Year raising prices in an attempt to pass on higher inventory, supplies, and labor costs,' said NFIB Chief Economist Bill Dunkelberg. 'In addition to inflation issues, owners are also raising compensation at record high rates to attract qualified employees to their open positions.'

==========

The Optimism Index decreased slightly in January by 1.8 points to 97.1. One of the 10 Index components improved, seven declined and two were unchanged. Twenty-two percent of owners reported that inflation was their single most important problem. Owners expecting better business conditions over the next six months increased 2 points to a net negative 33 percent. Forty-seven percent of owners reported job openings that could not be filled, decrease of 2 points from December. Inventory accumulation plans fell 5 percentage points. A 48-year record high percent of owners reported raising worker compensation. The net percent of owners raising average selling prices increased 4 points to a net 61 percent seasonally adjusted, the highest reading since Q4 1974.

Key Findings Include:

-- One of the Index components improved, seven declined, and two were unchanged.

-- Owners expecting better business conditions over the next six months increased two points to a net negative 33%. Small business owners remain pessimistic about future economic conditions as this indicator has declined 13 points over the past six months.

-- Forty-seven percent of owners reported job openings that could not be filled, a decrease of two points from December.

-- Inventory accumulation plans fell five percentage points..."

=========

• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.
  

=========

The previous month's Small Business Optimism Index was 98.9.

=========

• Click here to view the full NFIB report

 
=========

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NFIB Small Business Optimism Index for December 2021

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index for December 2021:

=========

Predicted: 98.8
Actual: 98.9

• Change from Previous Month: +0.508% (+0.5 point.)

• Change from 12 Months Previous: +3.128% (+3.0 points.)

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CHART: NFIB Small Business Optimism Index
December 2021 Update

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From today's report:

"...Small Business Owners Reporting Inflation as Biggest Problem Highest Since 1981

The NFIB Small Business Optimism Index increased slightly in December to 98.9, up 0.5 points from November. Twenty-two percent of small business owners reported that inflation was their single most important problem encountered in operating their business. Price raising activities has reached levels not seen since the early 1980’s when prices were rising at double digit rates.

'Small businesses unfortunately saw a disappointing December jobs report, with staffing issues continuing to impact their ability to be fully productive,' said NFIB Chief Economist Bill Dunkelberg. 'Inflation is at the highest level since the 1980’s and is having an overwhelming impact on owners’ ability to manage their businesses.'

Key Findings Include:

 --   22% report inflation as the single most important problem operating their business, a 20-point increase from the beginning of 2021 and the highest level since Q4 1981.

 --   Owners expecting better business conditions over the next six months increased three points to a net negative 35%. Owners remain pessimistic about future economic conditions as this indicator has declined 23 points over the past six months.

 --   49% of owners reported job openings that could not be filled, an increase of one point from November..."

=========

• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.
  

=========

The previous month's Small Business Optimism Index was 98.4.

=========

• Click here to view the full NFIB report

 
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NFIB Small Business Optimism Index for November 2021

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index for November 2021:

=========

Predicted: 98.5
Actual: 98.4

• Change from Previous Month: +0.204% (+0.2 point.)

• Change from 12 Months Previous: -2.959% (-3.0 points.)

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CHART: NFIB Small Business Optimism Index
November 2021 Update

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From today's report:

"...'As the end of the year nears, the outlook for business conditions is not encouraging to small business owners as lawmakers propose additional mandates and tax increases,' said NFIB Chief Economist Bill Dunkelberg. 'Owners are also pessimistic as many continue managing challenges like rampant inflation and supply chain disruptions that are impacting their businesses right now.'..."

-- Owners expecting better business conditions over the next six months decreased one point to a net negative 38%, tied for the 48-year record low reading. This indicator has declined 18 points over the past four months to its lowest reading since November 2012.

-- The net percent of owners raising selling prices increased six points to a net 59% (seasonally adjusted), the highest reading since October 1979.

-- Seasonally adjusted, a net 54% of owners plan price hikes, up three points from October and a 48-year record high reading.

-- Forty-eight percent of owners reported job openings that could not be filled, a decrease of one point from October.

=========

• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.
  

=========

The previous month's Small Business Optimism Index was 98.2.

=========

• Click here to view the full NFIB report

 
=========

 

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NFIB Small Business Optimism Index for July 2021

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index for July 2021:

=========

Predicted: 102.0
Actual: 99.7

• Change from Previous Month: -2.732% (-2.8 points.)

• Change from 12 Months Previous: +0.911% (+0.9 point.)

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NFIB Small Business Optimism Index
July 2021 Update

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From today's report:

"...'Small business owners are losing confidence in the strength of the economy and expect a slowdown in job creation,' said NFIB Chief Economist Bill Dunkelberg. 'As owners look for qualified workers, they are also reporting that supply chain disruptions are having an impact on their businesses. Ultimately, owners could sell more if they could acquire more supplies and inventories from their supply chains.'..."

 =========

• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.
  

=========

The previous month's Small Business Optimism Index was 102.5.

=========

• Click here to view the full NFIB report

 
=========

 

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NFIB Small Business Optimism Index for May 2021

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index for May 2021:

=========

Predicted: 100.0
Actual: 99.6

• Change from Previous Month: -0.2004% (-0.2 point.)

• Change from 12 Months Previous: +5.508% (+5.2 points.)

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NFIB Small Business Optimism Index
May 2021 Update

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From today's report:

"...'Small business owners are struggling at record levels trying to get workers back in open positions,' said NFIB Chief Economist  Bill Dunkelberg. 'Owners are offering higher wages to try to remedy the labor shortage problem. Ultimately, higher labor costs are being passed on to customers in higher selling prices.'..."

 "...Sixty-one percent of owners reporting hiring or trying to hire in May. Owners have plans to fill open positions with a seasonally adjusted net 27% planning to create new jobs in the next three months.

A net 34% of owners (seasonally adjusted) reported raising compensation, the highest level in the past 12 months. A net 22% of owners plan to raise compensation in the next three months, up two points from April.

Small business owners continue to report finding qualified employees remains a problem with 93% of owners hiring or trying to hire reported few or no 'qualified' applications for the positions they were trying to fill in May. Thirty-two percent of owners reported few qualified applicants for their positions and 25% reported none.

Eight percent of owners cited labor costs as their top business problem and 26% said that labor quality was their top business problem, the top business concern.

Forty percent of small business owners have job openings for skilled workers and 27% have openings for unskilled labor. In the construction industry, 51% of job openings are for skilled workers. Sixty-six percent of construction businesses reported few or no qualified applicants..."

 =========

• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.
  

=========

The previous month's Small Business Optimism Index was 99.8.

=========

• Click here to view the full NFIB report

 
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NFIB Small Business Optimism Index for February 2021

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index (SBOI) for February 2021:

=========

Predicted: 95.0
Actual: 95.8

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• Change from Previous Month: +0.842% (+ 0.8 point)

• Change from 12 Months Previous: -8.325% (-8.7 points)

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• The January 2021 SBOI reading was 95.0
  
  
• The February 2020 SBOI reading was 104.5

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NFIB Small Business Optimism Index
February 2021 Update

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From Today's Report:

"...'Small business owners worked hard in February to overcome unexpected weather conditions along with the ongoing COVID-19 pandemic,' said NFIB Chief Economist Bill Dunkelberg. 'Capital spending has been strong, but not on Main Street. The economic recovery remains uneven for small businesses, especially those still managing state and local regulations and restrictions. Congress and the Biden administration must keep small businesses a priority as they plan future policy legislation.'..."

 =========

• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.

=========

• Click here to view the full NFIB report

=========

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NFIB Small Business Optimism Index for March 2020

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index (SBOI) for March 2020:

=========

Predicted: 95.0
Actual: 96.4

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• Change from Previous Month: -7.751% (-8.1 points)

• Change from 12 Months Previous: -5.305% (-5.4 points)

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• The February 2020 SBOI reading was 104.5
  
  
• The March 2019 SBOI reading was 101.8

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Chart: NFIB Small Business Optimism Index
March 2020 Update

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From Today's Report:

"...Abrupt Turn in Small Business Optimism Ends 39-Month Historic Run

The NFIB Small Business Optimism Index fell 8.1 points in March to 96.4, the largest monthly decline in the survey’s history. Nine of the 10 Index components declined, which is evidence that economic disruptions are escalating on Main Street as small businesses struggle to keep their doors open. The small business sector is anticipating and bracing for continued economic disruptions going forward.

'Small businesses are living through the coronavirus pandemic right now and it’s hard to say what the severity of the disruption will be, but we do know they’re feeling the urgency,' said NFIB Chief Economist William Dunkelberg. 'It is vital that these businesses have access to federal funds that are made available through the CARES Act to keep the doors open on Main Street.'

The financial markets saw substantial change in March, with the stock market indices losing 22% of their value and jobless claims rising to a record 10 million in the last two weeks of the month. The NFIB survey collected the majority of responses in the first half of the month, so the sharp decline in employment is not reflected in the March survey data.

The Main Takeaways from the March Survey Include:

• The NFIB Uncertainty Index rose 12 points in March to 92, the highest level since March 2017.
  
  
• Reports of better business conditions in the next six months declined 17 points to a net 5%, which is the largest monthly decline since November 2012.

• Real sales expectations in the next six months declined 31 points to a net negative 12%, the largest monthly decline in the survey’s history.
  
  
• Thirteen percent of firms thought it was a good time to expand, a decline of 13 points from last month.
   
• Job openings fell three points to 35%.

   
As reported in NFIB’s monthly jobs report, prior to the COVID-19 outbreak, the small business labor market reported strong hiring, elevated levels of open positions, and historically high employee compensation. However, hiring plans experienced a significant drop from February yet finding qualified workers remains the top issue for 24% of small employers who reported this as their No. 1 problem.

Down two points from February, 60% of owners reported capital outlays. Of those making expenditures, 43% reported spending on new equipment, 26% acquired vehicles, 16% improved or expanded facilities, 6% acquired new buildings or land for expansion, and 12% spend money for new fixtures and furniture. Twenty-one percent of owners are planning capital outlays in the next few months, a sign that small business owners are scaling back spending as economic conditions started to disrupt the nation.

Sales held strong in March, with a seasonally adjusted net 8% of all owners reporting higher nominal sales in the past three months. As actual sales volumes remained strong, expectations of the future of sales growth deteriorated significantly. It is clear owners felt the pending economic shift as state officials began to shut down non-essential businesses and issue stay-at-home orders in response to coronavirus.

A net negative three percent of owners are planning to expand inventory holdings. Small business owners are bracing themselves for a significant reduction in consumer spending and future orders.

The frequency of reports of positive profit trends fell two points to a net negative 6% reporting quarter-on-quarter profits. Among the owners reporting weaker profits, 32% blamed weaker sales, 26% blamed usual seasonal change, 9% cited price changes, 7% cited labor costs, and 7% cited material costs. For those reporting higher profits, 53% credited sales volumes and 22% credited usual seasonal change.

NFIB released surveys in March on how COVID-19 is impacting small businesses. The latest survey showed 92% of small employers are negatively impacted by the outbreak and about half of small employers said they can survive for no more than two months under the current business conditions..."

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• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.

=========

• Click here to view the full NFIB report

=========

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NFIB Small Business Optimism Index for January 2020

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index (SBOI) for January 2020:

=========

Predicted: 103.2
Actual: 104.3

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• Change from Previous Month: +1.558% (+1.6 points)

• Change from 12 Months Previous: +3.063% (+3.1 points)

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• The December 2019 SBOI reading was 102.7
  
  
• The January 2019 SBOI reading was 101.2

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Chart: NFIB Small Business Optimism Index
January 2020 Update

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From Today's Report:

"...'2020 is off to an explosive start for the small business economy, with owners expecting increased sales, earnings, and higher wages for employees,' said NFIB Chief Economist William Dunkelberg. 'Small businesses continue to build on the solid foundation of supportive federal tax policies and a deregulatory environment that allows owners to put an increased focus on operating and growing their businesses.'..."

 =========

• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.

=========

• Click here to view the full NFIB report

=========

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NFIB Small Business Optimism Index for November 2019

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index (SBOI) for November 2019:

=========

Predicted: 102.9
Actual: 104.7

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• Change from Previous Month: +2.246% (+2.3 points)

• Change from 12 Months Previous: -0.095% (-0.1 point)

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• The October 2019 SBOI reading was 102.4
  
  
• The November 2018 SBOI reading was 104.8

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Chart: NFIB Small Business Optimism Index
November 2019 Update

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From Today's Report:

"...Small Business Optimism Sees Major Spike in November

Small business optimism posted the largest month-over-month gain since May 2018, rising 2.3 points to 104.7 in November. The exceptional Optimism Index reading was bolstered by seven of the 10 Index components advancing, led by a 10-point improvement in earnings. Owners reporting it is a good time to expand increased by 6 points and those expecting better business conditions increased by 3 points. The NFIB Uncertainty Index fell 6 points in November to 72, adding to the 4-point drop in October and the lowest reading since May 2018.

'This historic run may defy the expectations of many, but it comes as no surprise to small business owners who understand what a supportive tax and regulatory environment can do for their companies,' said NFIB Chief Economist William Dunkelberg. 'As the two-year anniversary of the Tax Cuts and Jobs Act’s passage approaches this month, small businesses, the world’s third largest economy, are using those savings to power the American economy.'

Earnings, or the frequency that owners report positive profit trends, rose 10 points, 1 point below the record set in May 2018, to a net 2 percent reporting quarter on quarter profit improvements. Stronger profits negated some cost pressures (especially labor) limiting the need to raise prices. A net 12 percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up 8 points and the highest level since May 2018.

'Owners are aggressively moving forward with their business plans, proving that when they’re given relief from the government, they put their money where their mouth is, and they invest, hire, and increase wages,' said NFIB Chief Economist William Dunkelberg. 'Owners are most closely focused on issues that directly impact their business, including the real, significant tax relief they were given two years ago, and they’re anxious to see that relief made permanent.'

As reported last week in NFIB’s monthly jobs report, a net 30 percent of small business owners, seasonally adjusted, reported raising compensation (unchanged) and 26 percent plan to do so in the coming months, up 4 points and the highest level since December 1989. Job creation jumped in November, with an average addition of 0.29 workers per firm, the highest level since May. Finding qualified workers though remains the top issue for 26 percent reporting this as their number one problem, 1 point below August’s record high.

Owners raising average selling prices rose 2 points to a net 12 percent, seasonally adjusted. Price hikes were most frequent in the retail trades (7 percent lower, 24 higher) and construction (6 percent lower, 23 higher). On balance, inflationary pressures are weak on Main Street as confirmed by government inflation reports.

November reflects a stark departure from previous months of clatter months about a possible recession that dampened owners’ economic outlook. But the current focus and noise in Washington, D.C. around impeachment is proving to have little, if any, impact on small business owners, no different than during the impeachment proceedings of President Bill Clinton..."

 =========

• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.

=========

• Click here to view the full NFIB report

=========

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NFIB Small Business Optimism Index for July 2019

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index (SBOI) for July 2019:

=========

Predicted: 103.0
Actual: 104.7

• Change from Previous Month: +1.355% (+1.4 points)

• Change from 12 Months Previous: -2.966% (-3.2 points)

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• The previous month's SBOI reading was 103.3
  
  
• The July 2018 SBOI reading was 107.9

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Chart: NFIB Small Business Optimism Index - July 2019 Update

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From Today's Report:

"...Optimism among small business owners bounced back in July as expectations for business conditions, real sales, and expansion made solid gains. The NFIB Small Business Optimism Index rose 1.4 points to 104.7, with seven of 10 components advancing, two falling, and one remaining unchanged. The Uncertainty Index fell 10 points, reversing a surge in June that reached the highest level since March 2017.

'While many are talking about a slowing economy and possible signs of a recession, the 3rd largest economy in the world continues to defy expectations, generating output, creating value, and expanding the economy,' said NFIB President and CEO Juanita D. Duggan. 'Small business owners want to grow their operations, and the only thing stopping them is finding qualified workers.'

In addition to improvement in expectations for business conditions, real sales, and expansion, key findings from the July index include:

• Small business owners’ plans to create new jobs and make capital outlays advanced and earnings trends improved, supported by a solid improvement in sales trends.

• Plans to order new inventories posted a solid gain.

• After surging last month, reports of higher average selling prices stabilized, with no evidence of a pickup in inflation.

• Credit conditions remain very supportive, interest rates on loans are historically low, and there are few complaints about credit availability.

'Contrary to the narrative about impending economic doom, the small business sector remains exceptional. This month’s index is a confirmation that small business owners remain very optimistic about the economy but are being hamstrung by not finding the workers they need,' said NFIB Chief Economist William Dunkelberg..."

 =========

• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.

=========

• Click here to view the full NFIB report

=========

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NFIB Small Business Optimism Index for June 2019

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index (SBOI) for June 2019:

=========

Predicted: 104.0
Actual: 103.3

• Change from Previous Month: -1.619% (-1.7 points)

• Change from 12 Months Previous: -3.638% (-3.9 points)

=========

• The previous month's SBOI reading was 105.0
  
  
• The June 2018 SBOI reading was 107.2

=========

Chart: NFIB Small Business Optimism Index - June 2019 Update

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From Today's Report:

"...America’s small business owners’ optimism took a modest downturn in June, according to the NFIB Small Business Optimism Index, slipping 1.7 points to 103.3. While optimism remains at historically high levels, the June figure reverses the gain posted in May, with six components falling, three improving, and one unchanged. The Uncertainty Index rose substantially, increasing seven points to the highest level since March 2017.

'Last month, small business owners curbed spending, sales expectations and profits both fell, and the outlook for expansion dampened. When you add difficulty finding qualified workers and harmful state level laws and regulations, you’re left with a volatile mix where uncertainty has increased to levels not seen in more than two years,' said NFIB President and CEO Juanita D. Duggan.

Both capital spending plans and reports of actual spending fell in June, reversing last month’s gains. The inventory component strengthened in June with owners saying existing inventory stocks were lean and planning to add to them. Sales and earnings trends softened, while expected credit conditions remained favorable.  More owners expect credit conditions to tighten rather than ease by a two-to-one margin, with most expecting no change.

'As expectations for sales gains and the general business environment faded, uncertainty levels increased,' said NFIB Chief Economist William Dunkelberg. 'Still, job openings and plans to create jobs remain historically very strong, and while it’s not as ‘hot’ as May, Main Street is still running strong.'

Twenty-six percent of owners plan capital outlays in the next few months, down four points, and an indication there is more reluctance to make major spending commitments when the future becomes less certain. Fifty-four percent reported capital outlays, down 10 points. Of those making expenditures, 40 percent reported spending on new equipment (down four points), 22 percent acquired vehicles (down seven points), and 12 percent improved or expanded facilities (down seven points).

The net percent of owners reporting inventory increases fell two points to a net zero percent, indicating no further building in inventory stocks in June. The net percent of owners viewing current inventory stocks as 'too low' rose four points to a net zero percent, overall balance.  Major imbalances reported in May have been resolved in most industries with the exception of manufacturing (18 percent too large, five percent too low) and agriculture (eight percent too large, 14 percent too low). The net percent of owners planning to expand inventory holdings did increase one point to a net three percent, a solid number.

A net seven percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down two percentage points but a very solid reading. The net percent of owners expecting higher real sales volumes fell six points to a net 17 percent of owners. Excluding the government shutdown earlier this year, this is the weakest reading since September 2017.

'Contextually, owners expecting higher real sales volumes averaged a net negative three percent in the 12 months leading up to November 2016, making the current reading look relatively good, but not as good as the 31 percent reading in May of last year,' said Dunkelberg. 'The economy is still advancing at a solid pace, but it is expected to be a slower pace than the first quarter.'

The frequency of reports of positive profit trends slipped six points to a net negative seven percent reporting quarter on quarter profit improvements. Twenty-seven percent of those reporting weaker profits blamed sales (down three points), 12 percent blamed labor costs (up five points), 11 percent cited materials costs, and nine percent cited lower selling prices (down two points).

Three percent of owners reported that all their borrowing needs were not satisfied, unchanged and historically very low.  Twenty-nine percent reported all credit needs met (down five points) and 55 percent said they were not interested in a loan, up one point.  A record low two percent reported their last loan was harder to get than the previous one. Two percent reported that financing was their top business problem (unchanged) compared to 21 percent citing the availability of qualified labor, 18 percent citing taxes, 13 percent regulations and red tape.

As reported in the June NFIB Jobs Report, small business owners added a net addition of 0.21 workers per firm, with 21 percent citing the difficulty of finding qualified workers as their Single Most Important Business Problem. Fifty-eight percent of owners reported hiring or trying to hire employees, down four points from last month, but 50 percent reported few or no qualified applicants for the positions they were trying to fill..."

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• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.

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• Click here to view the full NFIB report

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NFIB Small Business Optimism Index for September 2018

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index (SBOI) for September 2018:

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Predicted: 108.0
Actual: 107.9

• Change from Previous Month: -0.827% (-0.9 point)

• Change from 12 Months Previous: +4.757% (+4.9 points)

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The previous month's SBOI reading was 108.8.

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Chart: NFIB Small Business Optimism Index - September 2018 Update

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Chart: NFIB Small Business Outlook - September 2018 Update

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From Today's Report (note text in bold):

"...The NFIB Small Business Optimism Index continued its historic 23-month positive trend, with a reading of 107.9 in September, the third highest reading in the survey’s 45-year history. In the small business half of the economy, 2018 has produced 45-year record high measures of job openings, hiring plans, actual job creation, compensation increases (actual and planned), profit growth, and inventory investment.

The September 2018 Survey Showed:

-- Actual capital spending in the past few months rose significantly.

-- Average employment change per firm was solid.

-- Owners bulked up inventories.

-- Compensation increases set a new record.

'This is the longest streak of small business optimism in history, evidence that tax cuts and regulatory rollbacks are paying off for the economy as a whole,' said NFIB President and CEO Juanita D. Duggan. 'Our members say that business is booming and prospects continue to look bright.'

Actual investment spending improved as prospects for the economy remain strong. Sixty percent of owners reported capital outlays, up four points from August. Of those making expenditures, 41 percent reported spending on new equipment (up two points), 26 percent acquired vehicles (up four points), and 16 percent improved or expanded facilities (down two points).

Consumer spending temporarily slowed in August, likely producing excess inventories but has picked up again which will reverse the build-up. The net percent of owners expecting higher real sales volumes rose three points to a net 29 percent of owners. Owners reporting inventory increases rose one point to a net five percent (seasonally adjusted). Strong expectations for higher real sales translate into higher expected returns on capital investments as well as a need for more employees.

'The economy continues to deliver a spectacular performance for one so near its record length. Small business owners continue to face labor force challenges but are increasing compensation to keep up,' said NFIB Chief Economist Bill Dunkelberg. 'With profits and investment remaining strong, our hope is that policymakers will stay the course and not screw around with success.'

A record net 37 percent of owners reported raising overall compensation, as reported in last week’s NFIB monthly jobs report. This surpasses the previous record of a net 35 percent in May 2018. Twenty-four percent plan to increase total compensation at their firm and six percent plan reductions. Sixty-one percent of owners reported hiring or trying to hire, with 87 percent of those reporting few or no qualified workers. Thirty-eight percent of owners reported job openings they could not fill in the current period, unchanged from last month..."

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• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.

=========

• Click here to view the full NFIB report

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NFIB Small Business Optimism Index for July 2018

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index (SBOI) for July 2018:

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Predicted: 107.1
Actual: 107.9

• Change from Previous Month: +0.653% (+0.7 point)

• Change from 12 Months Previous: +2.567% (+2.7 points)

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The previous month's SBOI reading was 107.2.

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Chart: NFIB Small Business Optimism Index - July 2018 Update

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Chart: NFIB Small Business Outlook - July 2018 Update

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From today's report (note text in bold):

"...The Small Business Optimism Index marked its second highest level in the survey’s 45-year history at 107.9, rising to within 0.1 point of the July 1983 record-high of 108. The July 2018 report also set new records in terms of owners reporting job creation plans and those with job openings. A seasonally-adjusted net 23 percent are planning to create new jobs, up three points from June. Thirty-seven percent of all owners reported job openings they could not fill in the current period, a one-point increase from June.

'Small business owners are leading this economy and expressing optimism rivaling the highest levels in history,' said NFIB President and CEO Juanita Duggan. 'Expansion continues to be a priority for small businesses who show no signs of slowing as they anticipate more sales and better business conditions.'

A net eight percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months compared to the prior three months. July is the eighth consecutive strong month of reported sales gains after years of low or negative numbers.  A net 35 percent of owners expect better business conditions, ticking up two points from June.

Additional July highlights include:

-- The percent of owners citing the availability of qualified workers as their number one business problem landed one point below the record high.

-- Reports of compensation increases remained strong.

-- Capital spending maintained a respectable pace but did not display the exuberance of its fellow indicators, although spending plans did post a gain.

-- Plans to add to inventory holdings were strong as strong sales continue to deplete stocks.

-- Profits continued to perform, and more firms raised prices, something that is easier when demand is strong.

'Small business owners have never been so optimistic for so long, helping to power the second longest expansion in history,' said NFIB Chief Economist Bill Dunkelberg. 'Despite challenges in finding qualified workers to fill a record number of job openings, they’re taking advantage of this economy and pursuing growth.'

Fifty-nine percent reported hiring or trying to hire (down four points), but 52 percent (88 percent of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill.  Twenty-three percent of owners cited the difficulty of finding qualified workers as their single most important business problem (up two points), one point below the 45-year record high..."

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• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.
  

=========

• Click here to view the full NFIB report

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NFIB Small Business Optimism Index for May 2018

The National Federation of Independent Business® (NFIB®) released its Small Business Optimism Index (SBOI) for May 2018:

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Predicted: 105.2
Actual: 107.8

• Change from Previous Month: +2.863% (+3.0 points)

• Change from 12 Months Previous: +3.158% (+3.3 points)

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The previous month's SBOI reading was 104.8.

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NFIB - Small Business Optimism Index - May 2018

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NFIB - Small Business Outlook - May 2018

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From today's report (note text in bold):

"...The Small Business Optimism Index increased in May to the second highest level in the NFIB survey’s 45-year history. The index rose to 107.8, a three-point gain, with small businesses reporting high numbers in several key areas including compensation, profits, and sales trends.

'Main Street optimism is on a stratospheric trajectory thanks to recent tax cuts and regulatory changes. For years, owners have continuously signaled that when taxes and regulations ease, earnings and employee compensation increase,' said NFIB President and CEO Juanita Duggan.

The May report hit several records:
 -- Compensation increases hit a 45-year high at a record net 35 percent.

 -- Positive earnings trends reached a survey high at a net three percent.

 -- Positive sales trends are at the highest level since 1995.

 -- Expansion plans are the most robust in survey history.

In another interesting marker, a net 19 percent of small business owners are planning price increases, the highest since 2008 and a signal of a strong economy. A net three percent reported positive profit trends, up four points and the best reading in the survey’s history. In addition, a net 15 percent reported higher nominal sales in the past three months, up an astonishing seven points and the sixth consecutive strong month for sales.

'Small business owners are continuing an 18-month streak of unprecedented optimism which is leading to more hiring and raising wages,' said NFIB Chief Economist Bill Dunkelberg. 'While they continue to face challenges in hiring qualified workers, they now have more resources to commit to attracting candidates.'

Small business owners continue to hire with a seasonally-adjusted net 18 percent planning to create new jobs. Twenty-nine percent of owners have job openings for skilled workers, the third highest reading since 2000. Twelve percent have job openings for unskilled workers, with the strongest demand in the transportation, travel, communications, and utilities sector. To compete in the job market, 35 percent of owners reported increases in labor compensation to attract job applicants.

The percentage of owners reporting capital outlays moved up one point to 62 percent, with 47 percent reporting spending on new equipment, 24 percent acquiring vehicles, and 16 percent improving expanded facilities. Thirty percent plan capital outlays in the next few months.

Access to credit continues as a non-issue with 37 percent of owners reporting all credit needs were satisfied and 43 percent saying they were not interested in a loan, down seven points from last month and the lowest reading since 2007. Only one percent reported that financing was their top business problem. Owners planning to build inventories rose three points to a net four percent, the nineteenth positive reading in the past 20 months.

As reported in NFIB’s May jobs report, 23 percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem, followed by taxes at 17 percent and regulations at 13 percent. Fifty-eight percent reported hiring or trying to hire, up one point from last month but 83 percent of those reported few or no qualified workers..."

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• Small business survey questions can be found at the end of today's report.

• The baseline "100" score is associated with 1986 survey data.
  

=========

• Click here to view the full NFIB report

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