The NFIB Small Business Optimism Index rose 0.1 points in July to 94.6. Four of the 10 Index components posted a gain, four declined and two were unchanged. The outlook for business conditions in the next six months continued to improve, gaining 16 percentage points since January, but still more owners still expect conditions to be worse than expect improvement.
“Small business optimism was pretty much unchanged during the month of July and small businesses continue to be in maintenance mode,” said NFIB Chief Economist Bill Dunkelberg. “Uncertainty is high, expectations for better business conditions are low, and future business investments look weak. Our data indicates that there is little hope for a surge in the small business sector anytime soon.”
Fifty-three percent reported hiring or trying to hire (down 3 points), but 46 percent reported few or no qualified applicants for the positions they were trying to fill. Fourteen percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem. This issue ranks third out of nine major issues listed. Twenty-six percent of all owners reported job openings they could not fill in the current period, down three points from, the highest reading in this recovery. Thirteen percent reported using temporary workers, up one point. A seasonally adjusted net 12 percent plan to create new jobs, up one point from June.
Fifty-nine percent reported capital outlays, up two points from June. The survey shows no strength in capital spending, consistent with reports from the Bureau of Economic Analysis on GDP. The percent of owners planning capital outlays in the next three to six months fell one point to 25 percent, a high reading in this expansion, but historically weak. The small business sector remains in “maintenance mode,” spending will continue to stay in place, but not expand.
Inflationary pressures remain dormant on Main Street. Seasonally adjusted, the net percent of owners raising selling prices fell four points from June to a negative 2 percent. Seasonally adjusted, a net 14 percent plan price hikes (down two points). Prospects for a resurgence of inflation are low, especially with gas prices on the decline again.
A seasonally adjusted net 24 percent of owners reported raising worker compensation, up two points from June but two points below May. The net percent planning to increase compensation rose one point to a net 15 percent.
