Small business optimism near record level

William Dunkelberg
William Dunkelberg
Juanita Duggan
Juanita Duggan

A monthly measure of optimism among small business owners has climbed to near record levels on more upbeat expectations for staffing, sales, and economic conditions.

The National Federation of Independent Business reported its Small Business Optimism Index rose seven-tenths of a point to 107.9 in July. That’s the second-highest reading in the
45-year history of the index and only a tenth of a point below the record high of 108 set in July 1983.

“Small business owners have never been so optimistic for so long, helping to power the second longest expansion in history,” said Bill Dunkelberg, chief economist of the NFIB. “Despite challenges in finding qualified workers to fill a record number of job openings, they’re taking advantage of this economy and pursuing growth.”

Juanita Duggan, president and chief executive officer of the NFIB, agreed. “Small business owners are leading this economy and expressing optimism rivaling the highest levels in history. Expansion  continues to be a priority for small businesses, who show no signs of slowing as they anticipate more sales and better business conditions.”

The NFIB bases the index on the results of surveys of members of the small business advocacy group, most of them small business owners. For July, six of 10 components of the index increased, two decreased and two remained unchanged.

A record 23 percent of those who responded to the survey reported plans to increase staffing, up three points from June. A record 37 percent reported unfilled job openings, up a point. At the same time, 23 percent cited the availability of quality workers as their single most important problem, matching the survey high.

A net 29 percent said they expect sales to increase, a gain of three points. Still, a net negative 1 percent of owners reported higher earnings, unchanged from last month.

A net 35 percent said they expect the economy to improve, up two points.

A net 30 percent reported plans to increase capital outlays in coming months, up a point. A net 32 percent said they consider now a good time to expand, an increase of three points.

The proportion of those who plan to increase inventories fell two points to a net 4 percent. At a net negative 3 percent, more owners indicated existing inventories were too high than too low.