NFIB Small Business Optimism Index Rose to 91 in June
Washington, DC, July 11, 2023-The NFIB Small Business Optimism Index increased 1.6 points in June to 91.0, however, it is the 18th consecutive month below the 49-year average of 98. Inflation and labor quality are tied as the top small business concerns with 24% of owners reporting each as their single most important problem. The net percent of owners raising average selling prices decreased three points to a net 29% seasonally adjusted, still a very inflationary level but trending down. This is the lowest reading since March 2021.
“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:
* Small business owners expecting better business conditions over the next six months improved ten points from May to a net negative 40%, 21 percentage points better than last June’s reading of a net negative 61%.
* Forty-two percent of owners reported job openings that were hard to fill, down two points from May but remaining historically very high.
* The net percent of owners who expect real sales to be higher improved seven points from May to a net negative 14%.
As reported in NFIB’s monthly jobs report, 59% of owners reported hiring or trying to hire in June, down four points from May. Of those hiring or trying to hire, 92% reported few or no qualified applicants for the positions they were trying to fill.
Fifty-three percent of owners reported capital outlays in the last six months, down four points from May. Of those making expenditures, 37% reported spending on new equipment, 21% acquired vehicles, and 14% improved or expanded facilities. Eight percent spent money on new fixtures and furniture and 6% acquired new buildings or land for expansion. Twenty-five percent of owners plan capital outlays in the next few months. Overall, business investment is weak.
A net negative 10% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down two points from May. The net percent of owners expecting higher real sales volumes improved seven points to a net negative 14%. A very negative outlook for the second half.
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