Small Biz Optimism Falls Slightly

By Jeffery Bellant August 11, 2020
A net negative 28 percent of all owners (seasonally adjusted) reported higher nominal sales in the past 3 months. A net negative 28 percent of all owners (seasonally adjusted) reported higher nominal sales in the past 3 months.

NFIB’s Small Business Optimism Index fell 1.8 points to 98.8 in July, near the survey’s historical average. Overall, 4 of the 10 Index components improved, 5 declined, and 1 was unchanged. The NFIB Uncertainty Index increased 7 points to 88. Reports of expected better business conditions in the next six months declined 14 points to a net 25 percent. Owners continue to temper their expectations of future economic conditions as the COVID-19 public health crisis is expected to continue.

“This summer has been challenging for many small business owners who are working hard to keep their doors open and remain in business,” said NFIB’s Chief Economist Bill Dunkelberg. “Small business represents nearly half of the GDP and this month we saw a dip in optimism. There is still plenty of work to be done to get businesses back to pre-crisis numbers.”

Other key findings include:

  • Real sales expectations in the next 3 months decreased 8 points to a net 5%.
  • The percent of owners thinking it’s a good time to expand decreased 2 points to 11% of owners.
  • Earnings trends over the past 3 months improved 3 points to a net negative 32%.
  • Job creation plans increased 2 points to a net 18 percent.

A seasonally adjusted net 18 percent plan to create new jobs in the next 3 months, up 2 points from June and 17 percentage points above April. Owners are interested in hiring but many workers may not be ready to return.

Classic cars remain hot sellers
Classic car sales have remained hot sellers and gained traction online.

Up one point from last month, 49 percent of owners reported capital outlays in the last six months. Of those making expenditures, 33 percent reported spending on new equipment, 21 percent acquired vehicles, and 13 percent improved or expanded facilities. Five percent acquired new buildings or land for expansion and 10 percent spent money for new fixtures and furniture. Twenty-six percent of owners are planning capital outlays in the next few months.

A net negative 28 percent of all owners (seasonally adjusted) reported higher nominal sales in the past 3 months. Even with states reopening, sales are often lower due to business restrictions, social distancing requirements, and a still-reduced willingness of consumers to go out and mingle with the general population.

The net percent of owners reporting inventory increases improved 3 points to a net negative 11 percent. The net percent of owners viewing current inventory stocks as “too low” was unchanged from June at 1 percent. The net percent of owners planning to expand inventory holdings decreased from June by 3 points to a net 4 percent. This reading is the third-highest quarterly reading since 2007.

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Last modified on Wednesday, 12 August 2020 13:48

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