Small Business Optimism Index Moves Higher in July

The NFIB Small Business Optimism Index rose slightly to 107.9, 0.7 point above June’s reading. This is just 0.1 point below the record level (108.0) reached in 1983. Thirty-two percent of business owners surveyed said the next three months was a good time to expand, three points higher than last month’s reading.

Reported job creation fell four points, as 59 percent of businesses reported hiring or trying to hire. However, 52 percent reported few or no qualified applicants for the positions they were trying to fill. Twenty-three percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem. A seasonally adjusted net 23 percent of owners plan to create new jobs, up three points from last month.

Seasonally adjusted, the net percent of owners expecting better business conditions increased two points to 35 percent. The percent of owners reporting higher sales in the past three months compared to the prior three months was a net 8 percent, down two points from June. Seasonally adjusted, the net percent of owners expecting higher real sales volumes rose three points to 29 percent of owners. Capital spending decreased one point as 58 percent of owners reported capital outlays. The percent of owners planning capital outlays in the next 3 to 6 months rose one point to 30 percent.

Credit concerns remained historically low, as just 3 percent of owners reported that all their borrowing needs were not met, unchanged from June. Only 2 percent of business owners surveyed reported that financing was their top business problem, while 17 percent of survey participants listed taxes as their top business problem.

Read the NFIB report.

About Jack McCabe

Jack McCabe is a research associate in the Economic Policy and Research group at the ABA.
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