Small Business Optimism Dips in June, Remains Historically High

The NFIB Small Business Optimism Index dipped to 103.6 in June but maintained the high level of post-election optimism. June’s index was 0.9 point lower than May’s 104.5 reading. Four of the ten index components rose, while five declined.

Reported job creation fell 5 points, as 54% of businesses reported hiring or trying to hire. However, 46% reported few or no qualified applicants for the positions they were trying to fill. Fifteen percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem. A seasonally adjusted net 15% of owners plan to create new jobs, down three points from the previous month.

Seasonally adjusted, the net percent of owners expecting better business conditions fell six points to a net 33%. The percent of owners reporting higher sales in the past three months compared to the prior three months was negative 4%, a 9-point decline from May’s reading. Seasonally adjusted, the net percent of owners expecting higher real sales volumes fell five points to a net 17% of owners. Capital spending moved down five points as 57% of owners reported capital outlays. The percent of owners planning capital outlays in the next 3 to 6 months increased three points to 30%, which is the highest reading since September 2007.

Credit conditions mostly held steady, as 4% of owners reported that all their borrowing needs were not met, one point higher than May but historically very low. Only 1% of business owners surveyed reported that financing was their top business problem, down one point from May.

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