A measure of optimism among small business owners continues to increase on more upbeat expectations for an improving economy and higher earnings.
The overall outlook remains unclear, though, because of the coronavirus pandemic, said Bill Dunkelberg, chief economist of the National Federation of Independent Business.
“As parts of the country continue to open, small businesses are seeing some improvements in foot traffic and sales,” Dunkelberg said. “However, some small businesses are still struggling financially to operate at full capacity while navigating state and local regulations and are uncertain what will happen in the future.”
The NFIB reported its Small Business Optimism Index rose 3.8 points to 104 in September, above the historical average of 100 for the 46-year-old index. Nine of 10 components of the index advanced between August and September. The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group, most of them small business owners.
The proportion of those responding to the survey upon which the September index was based who expect the economy to improve over the next six months rose eight points to a net 32 percent.
A net 28 percent reported plans to make capital outlays, up two points. A net 13 percent said they consider how a good time to expand, up a point.
The share of those who reported higher earnings rose 13 points. But at a net negative 12 percent, more still reported lower than higher earnings. Among those reporting weaker earnings, 51 percent cited weak sales, 9 percent blamed lower prices and 6 percent attributed the trend to seasonal changes.
A net 8 percent of those responding to the survey reported higher sales, up five points.
A net 11 percent reported plans to increase inventories, up five points. A net 5 percent said current inventories were too low, up two points.
A net 23 percent reported plans to increase staffing, up two points. A net 36 percent reported hard-to-fill job openings, up three points.
At the same time, 21 percent cited finding qualified labor as their top business problem, ahead of taxes, government regulations and poor sales.