A monthly measure of optimism among small business owners has retreated on less upbeat expectations for sales, earnings and capital outlays.
“As expectations for sales gains and the general business environment faded, uncertainty levels increased,” said Bill Dunkelberg, chief economist of the National Federation of Independent Business. “Still, job openings and plans to create jobs remain historically very strong. And while it’s not as hot as May, Main Street is still running strong.”
The NFIB reported its Small Business Optimism Index fell 1.7 points to 103.3 in June with six of 10 components of the index declining. The NFIB bases the index on the results of monthly surveys of the small business advocacy group, most of them small business owners.
For June, components for sales, earnings and expansions decreased the most.
A net 17 percent of business owners responding to the survey upon which the June index was based said they expect higher sales, down six points. The portion of owners reporting increased earnings also fell six points. At a net negative 7 percent, more owners reported lower earnings than higher earnings.
A net 26 percent of owners reported plans for capital outlays in coming months, down four points. A net 34 percent of owners said they consider now a good time to expand, down six points.
A net 16 percent of owners said they expect the economy to improve, unchanged from May.
A net 18 percent of owners said they plan to increase staffing, down three points. A net 36 percent of owners reported hard-to-fill job openings, down 2 points. In addition, 21 percent of owners cited the difficulty of finding qualified workers as their single most important business problem, ahead of taxes and regulation.
“When you add difficulty finding qualified workers and harmful state level laws and regulations, you’re left with a volatile mix where uncertainty has increased to levels not seen in more than two years,” said Juanita Duggan, president and chief executive officer of the NFIB.
A net 3 percent of owners reported plans to increase inventories, up a point. At a net 0 percent, the share of owners who said current inventories are too high matched those who said they’re too low.