The National Federation of Independent Business’ (NFIB’s) latest index of small-business optimism released Aug. 12 found that optimism “technically rose” 0.7 points to 95.7 in July with “little change” in the 10 index components. The outlook for expansion and business-conditions components accounted for the small gain in the index. And even with the improvement, those […]
The National Federation of Independent Business’ (NFIB’s) latest index of small-business optimism released Aug. 12 found that optimism “technically rose” 0.7 points to 95.7 in July with “little change” in the 10 index components.
The outlook for expansion and business-conditions components accounted for the small gain in the index. And even with the improvement, those components “still remain historically low,” the NFIB said in a news release.
Among the components, “expect economy to improve” rose four points and “now a good time to expand” increased three points compared to their readings last month, according to the NFIB data.
The slight changes in those two components represent the “positive side” of this month’s index, William (Bill) Dunkelberg, chief economist for the NFIB, said in the release.
“However, capital-spending reports continue to remain mediocre, spending plans are weak, and inventories are too large, with more owners reporting sales trends deteriorating than improving. As long as these stats continue to hold, the small business half of the economy will continue to not be able to pull its weight,” said Dunkelberg.
July indicators
Small-business owners increased employment an average of 0.01 workers per firm in July, which is seasonally adjusted.
It represents the 10th positive month in a row and the best string of gains since 2006, the NFIB said.
Seasonally adjusted, 13 percent of the business owners reported adding an average of 2.9 workers per firm over the past few months. That figure is up one percentage point from last month.
Offsetting that, 12 percent of owners reduced employment an average of 2.7 workers, producing the seasonally adjusted net gain of 0.01 workers per firm overall. The 12 percent figure is down one percentage point from last month, the data indicated.
Job-creation plans continued to “strengthen,” rising 1 percentage point to a seasonally adjusted net 13 percent, the best reading since September 2007, the NFIB said.
The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past three months compared to the prior three months fell 1 point to a net negative 3 percent, “still one of the very best readings since 2007,” the survey found.
Earnings trends were unchanged at a net negative 18 percent (net percent reporting quarter to quarter earnings trending higher or lower), “one of the best readings since 2007,” according to the NFIB.
Rising labor costs are keeping pressure on earnings, but there appears to be an improvement in profit trends in place, even if not historically strong.
The NFIB bases its report on the responses of more than 1,600 randomly sampled small businesses in its membership, which it surveyed throughout the month of July.
Contact Reinhardt at ereinhardt@cnybj.com
