Small Business Optimism Ticks Up

By Staff Writer September 13, 2022 115

The NFIB Small Business Optimism Index rose 1.9 points in August to 91.8, marking the eighth consecutive month below the 48-year average of 98 but reversing some of the declines in the first half of the year. Twenty-nine percent of owners reported that inflation was their single most important problem in operating their business, a decrease of eight points from July’s highest reading since the fourth quarter of 1979.

“The small business economy is still recovering from the pandemic while inflation continues to be a serious problem for owners across the nation,” said NFIB Chief Economist Bill Dunkelberg.

Key findings include:

  • Small business owners expecting better business conditions over the next six months improved 10 points from July to a net negative 42%, the highest level since February 2022, but a dismal outlook.
  • The net percent of owners raising average selling prices decreased three points to a net 53% (seasonally adjusted), still a very inflationary outcome.
  • The net percent of owners who expect real sales to be higher increased 10 points from July to a net negative 19%, but owners still want to hire.
  • The Uncertainty Index increased seven points to 74.

As reported in NFIB’s monthly jobs report, 49% of owners reported job openings that were hard to fill, unchanged from July and remaining historically high. Owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 21% planning to create new jobs in the next three months.

Fifty-two percent of owners reported capital outlays in the last six months, up one point from July. Of those making expenditures, 36% reported spending on new equipment, 18% acquired vehicles, and 14% improved or expanded facilities. Thirteen percent spent money for new fixtures and furniture and 6% acquired new buildings or land for expansion. Twenty-five percent of owners plan capital outlays in the next few months, up three points from July. Overall, spending and plans to spend are still historically weak.

Thirty-two percent of owners reported that supply chain disruptions have had a significant impact on their business. Another 33% report a moderate impact and 23% report a mild impact. Only 11% report no impact from recent supply chain disruptions.

A net 3% of owners viewed current inventory stocks as “too low” in August. Auto dealers and other durable goods merchants are still low on inventory.

The net percent of owners raising average selling prices decreased three points from July to a net 53% (seasonally adjusted). Unadjusted, 8% reported lower average selling prices and 60% reported higher average prices. Price hikes were the most frequent in construction (71% higher, 3% lower), retail (67% higher, 7% lower), transportation (62% higher, 0% lower), and manufacturing (61% higher, 3% lower).

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Last modified on Thursday, 15 September 2022 13:16